If a 1099 was issued to your SSN instead of your EIN, report the income on your business return using your correct entity information, then ask the payer to issue a corrected 1099 showing your EIN. The form itself is wrong, but the income is still yours and still taxable, and the IRS cares most that it ends up on the right return under the right taxpayer.1IRS. What is Taxable and Nontaxable Income?
Report the Income Correctly on Your Return
Do not wait for a corrected form before you file. Report the payment on whatever return matches your business structure: Schedule C for a sole proprietor or single-member LLC, Form 1120-S for an S corporation, Form 1065 for a partnership.2IRS. About Form 1120-S3IRS. About Form 1065 The 1099 is an information return; it is not what determines where the income belongs. Your return does.
Keep the incorrect 1099 with your records along with invoices, contracts, and payment confirmations that tie the money to your business. If the IRS later matches the SSN-tagged 1099 against your personal return and finds nothing there, it may send a CP2000 notice proposing additional tax on underreported income.4IRS. Topic No. 652 Notice of Underreported Income CP2000 A clean paper trail showing the same dollar amount reported under your EIN is what resolves that notice.
Ask the Payer for a Corrected 1099
Contact the payer as soon as you spot the error and ask for a corrected form that lists your legal business name and EIN. The IRS directs taxpayers who receive incorrect documents to go back to the issuer for corrections.5IRS. How to File When Taxpayers Have Incorrect or Missing Documents The payer, not you, is the party responsible for filing an accurate information return and bears any penalties for getting it wrong.6GovInfo. 26 U.S.C. § 6721
When you ask, send a fresh Form W-9 with your correct business name and EIN so the payer has clean source information to work from. A payer who agrees to correct the form will file a corrected 1099 with the IRS and send you a copy marked “CORRECTED.”
Watch for Backup Withholding
The biggest practical risk of leaving a name/TIN mismatch unresolved is backup withholding. If the IRS notifies the payer that the name and tax ID on the 1099 do not match its records, usually through a CP2100 or CP2100A notice, the payer may send you a B-Notice and, if the mismatch is not cleared up, must begin withholding on your future payments.7IRS. Understanding Your CP2100 or CP2100A Notice8IRS. Tax Withholding Types
The withholding rate is 24% of the gross payment, taken out immediately and sent to the IRS.9IRS. 10IRS. Forms and Associated Taxes for Independent Contractors If you want payments reported under your EIN, the W-9 you hand out needs to show your business’s legal name on the name line and your EIN in the tax ID box, not your SSN.
One note on single-member LLCs that are disregarded for tax purposes: the IRS generally expects the owner’s SSN or EIN on income tax reporting for that LLC, so if your LLC has no EIN of its own and you have not obtained one as the owner, a payer using your SSN is following the default rule.11IRS. Single Member Limited Liability Companies If you want your EIN used instead, you need to put it on the W-9 and confirm the payer records it that way before the next payment goes out.