Yes. A disregarded entity does get a 1099 when a business pays it $600 or more for services during the year, but the form is not made out to the LLC. Form 1099-NEC is issued in the name of the owner behind the disregarded entity, using the owner’s taxpayer identification number.1IRS. Am I required to file a Form 1099 or other information return?2IRS. Instructions for the Requester of Form W-9
Why the Owner’s Name Goes on the Form
A disregarded entity, most often a single-member LLC, is a business the IRS ignores as separate from its owner for federal income tax purposes. State law still recognizes it for liability purposes, and it may well have its own bank account and letterhead, but for income tax the IRS looks through the LLC to whoever owns it.3IRS. Single Member Limited Liability Companies
That is why the 1099-NEC follows the owner. The payer puts the owner’s legal name on the primary name line; the LLC’s business name can be added as well, but it does not replace the owner.2IRS. Instructions for the Requester of Form W-9
Which Taxpayer ID to Use
Match the TIN to whoever actually owns the LLC:2IRS. Instructions for the Requester of Form W-9
- An individual owner’s Social Security Number
- An Individual Taxpayer Identification Number if the owner uses one
- An Employer Identification Number if the owner is itself an entity, such as a corporation or partnership that owns the LLC
Get this information from the contractor on Form W-9 before you pay them, so the name and TIN on your 1099 match what the IRS has on file for the owner.
What About the LLC’s Own EIN?
Many single-member LLCs have their own EIN. Owners obtain one to open bank accounts, meet state licensing rules, or run payroll. A disregarded entity is in fact required to use its own name and EIN for employment taxes and certain excise taxes.3IRS. Single Member Limited Liability Companies
None of that changes 1099-NEC reporting. When the contractor fills out Form W-9, the owner must give their own name and TIN for income tax reporting, and the LLC’s separate EIN is generally not what goes on the 1099. The income has to be linked to the person or entity that will file the return reporting it.3IRS. Single Member Limited Liability Companies If the W-9 you receive shows only the LLC and its EIN, ask for a corrected one.
When the LLC Isn’t a Disregarded Entity
Not every LLC is disregarded, and the answer shifts with the tax classification.
A multi-member LLC is treated as a partnership by default unless it elects corporate treatment.4IRS. LLC filing as a corporation or partnership A partnership is a separate taxpayer, so the 1099-NEC is issued to the partnership using its own name and EIN.
An LLC can also elect to be taxed as a C-corporation or S-corporation by filing Form 8832.5IRS. About Form 8832, Entity Classification Election Payments to corporations are generally exempt from 1099 reporting. The exceptions, where you still must issue a 1099 to a corporation, are:1IRS. Am I required to file a Form 1099 or other information return?
- Payments for medical and health care services
- Payments for legal services or attorney fees
- Payments made by federal executive agencies for services
The practical check before you cut the 1099 is simple. Look at the W-9. If the contractor is a disregarded entity, the form goes to the owner, under the owner’s name and TIN, once you’ve paid $600 or more for services in the year.