1099 Filing Requirements

The 1099 filing season is here!

1099 information returns are due by January 31^st.  Two common types of the 1099 are a 1099-MISC and a 1099-DIV.  A 1099-MISC is required for payment for services of at least $600 to individuals and other businesses, excluding corporations.  Common examples of these payments include director fees, payments to a deceased employee’s estate, or attorney fees.  A 1099-DIV is required for all dividend payments of at least $10.  Cooperative patronage distributions are considered a return of margins and not dividends and should follow the 1099-MISC rules.  Payments to stockholders for stock repurchase are not required to be reported on a 1099.

The 1099’s are due to the payee by January 31^st.  If filing the 1099’s using paper copies they are due to the IRS by February 28^th.  If done through electronic means an extension is given until March 31^st.  Those companies filing 250 or more information returns are required to file electronically and others are encouraged to do so.

The IRS requires all 1099’s to be filed with the payee’s taxpayer identification number or social security number.  In cases where the payee has not provided their number, has provided an obviously incorrect number, or the IRS has notified the company of an invalid ID, backup withholding is required at a rate of 28%.

As usual with the IRS, failure to follow the guidelines can result in penalties to the company.  If you have any questions please contact Brent McClure at Kiesling Associates.