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Form 1099-MISC

Business Tax - 10 Dec 2015

If, during the calendar year, you hired US contractors in the course of running your trade or business, you may need to issue them a Form 1099-MISC.

Form 1099-MISC is required if any of the following apply:

  • You make payments of $600 or more to any one contractor during the tax year in the course of your trade or business. The contractor must be an individual or partnership.  Payments to corporations currently do not require Form 1099- MISC, except as noted below.
  • You make payments of professional fees to an attorney, doctor, or other professional (i.e. accounting firm) in the course of your trade or business. Do not issue Form 1099-MISC for payments that are for personal expenses.
  • You make payments to corporations, related only to medical, health care, legal or fishing
  • You make payments of $600 or more for rent of office space, machines, or equipment in the course of your trade or business. Payments to corporations or real estate agents currently do not require Form 1099- MISC

Payments subject to reporting include commissions, fees, interest, rents, royalties, annuities and any other type of compensation or income to a single recipient.

There are a few additional requirements to keep in mind:

  • The IRS deadline for mailing Forms 1099-MISC to recipients in respect of payments made in 2015 is 1 February 2016 (If you are reporting payments in boxes 8 or 14, the deadline for mailing Forms 1099-MISC is 16 February 2016) .
  • If you fail to issue a proper Form 1099-MISC, inadvertently or otherwise, the IRS can assess penalties. The penalty for each intentional failure can be $100 or more with a maximum penalty of $1,500,000 per year ($500,000 for small businesses).
  • The filing deadline to submit Form 1099-MISC with the transmittal Form 1096 is 29 February 2016 if paper filing, or 31 March 2016 if filing electronically.
  • Please note that states have various due dates.
  • Payments made to non-US persons may have to be reported on Form 1042-S.

Please speak to your regular Frank Hirth contact for more information.

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Stephen Christiano

Stephen Christiano

Business Tax Associate Director

T: +1 212 465 7800
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Office: New York