Yes, most LLC vendors get a Form 1099-NEC if paid $600 or more for services, unless the LLC is taxed as a corporation (S-corp or C-corp), in which case they generally do not receive one. The key factor is the LLC's tax classification: single-member LLCs (taxed as sole proprietors) and multi-member LLCs (taxed as partnerships) require 1099s, while those electing to be taxed as corporations are exempt. You can verify the tax status by checking the vendor's W-9 form.
Do LLC's get a form 1099-MISC? If you're a single-member LLC or taxed as a partnership: you will receive a 1099 from a company that pays you $600 or more in annual income. Meanwhile, LLC's taxed as an S Corporation do not receive a 1099.
An LLC receives a 1099 if it's taxed as a sole proprietorship (single-member) or a partnership, not a corporation, for services over $600 (usually Form 1099-NEC), but never if taxed as an S-Corp or C-Corp (except for specific legal/medical fees) or if paid via certain card processors. The easiest way to know is to check the LLC's Form W-9: if it's not marked as a corporation, you likely need to issue a 1099 for services.
You need to send 1099s to all vendors and contractors who are classified as a Sole Proprietor, LLC, LLP, or PC and to whom you have paid over $600 in the past year. You also need to include all attorneys to whom you have paid over $600, regardless of their business structure.
LLCs taxed as corporations: If the LLC has elected to be taxed as a corporation, you are not required to file a 1099 form. Payments to LLCs treated as corporations are not reportable since the IRS does not require this information for their corporate tax filings.
You generally exclude payments to corporations (C-corps, S-corps, and many LLCs), tax-exempt organizations, and for specific things like merchandise or freight, but exceptions exist for attorneys, medical services, and certain other professional fees even if paid to a corporation; also, payments via credit/debit cards or third-party processors (like PayPal) are typically handled by the processor, not you.
When a business pays an independent contractor for services performed in the course of that business, the service recipient must file Form 1099 MISC if the payment is $600 or more for the year, unless the service provider is a Corporation.
If you don't send a vendor or independent contractor a 1099 form when they should get one, you may not be able to claim the expense on your tax return, which could lead to a larger tax bill for your business.
For other income, you may receive Form 1099-MISC. If you accept credit card payments, you likely won't get a 1099-NEC for those payments. 1099-NEC forms are required for payments to individuals and LLCs.
Whether you have a large or small business, you must send forms to all payees with the exception of corporations and any payee earning under 600 for the year. In other words, all the self-employed independent contractors you paid over $600 in rents, services, awards, or other payments need you to send them a tax form.
Not filing Form 1099 incurs tiered penalties from the IRS, ranging from $60 to $340 per form for 2025 filings, depending on how late you file (within 30 days, after 30 days but by August 1, or after August 1/never filed). Intentional disregard significantly increases the penalty to a minimum of $680 per form with no maximum cap, and these penalties also apply for failing to provide recipient copies or filing incorrect information.
Businesses that pay more than $600 per year to an independent contractor must complete Form 1099-NEC and provide copies to both the IRS and the freelancer by the specified annual deadline.
The IRS is likely to catch a missing 1099 form. Using their matching system, the IRS can detect errors in your returns. They also receive a copy of your 1099 form, so they know exactly how much you owe in taxes. Keep all your records safely.
One-time forgiveness, officially known as First-Time Penalty Abatement (FTA), is an IRS program that allows qualified taxpayers to have certain penalties removed from their tax accounts.
For most payments to individuals (like contractors or for other income/rents), the 1099 reporting threshold is $600, though this increases to $2,000 for tax years starting after 2025 under new law; for payment apps (Form 1099-K), the old threshold was $20,000/200 transactions, but for 2024, a phased-in $5,000 threshold was planned, with the $20k/200 rule (and $10+ in royalties/broker payments) remaining for now for 1099-MISC. Key forms are 1099-NEC for non-employee compensation and 1099-MISC for other payments, with 1099-K for third-party platform payments.
As you know by now, the tax status of your LLC can vary a lot depending on how you set it up. Accordingly, an LLC will only get Form 1099-NEC if it's taxed as either a single-member LLC or a partnership. If it's taxed as an S corporation, it won't receive a 1099.
The 1099-NEC form for payments made during the calendar year is generally due to your 1099 vendors by January 31—giving you one month from the end of the tax year to fill out and issue those forms.
If a business intentionally disregards the requirement to provide a correct Form 1099-NEC or Form 1099-MISC, it's subject to a minimum penalty of $660 per form (tax year 2025) or 10% of the income reported on the form, with no maximum.
The $600 Threshold Rule
The IRS requires you to send a Form 1099 to an LLC if you have made a payment of $600 or more during a given calendar year.
You need to send a 1099 (usually Form 1099-NEC) to independent contractors, freelancers, and other non-employee service providers when you pay them $600 or more for services in a year, but not to C-corps, S-corps, or for payments for inventory, merchandise, or direct purchases of property. Key recipients include attorneys, marketing consultants, web developers, and real estate agents, while exceptions are typically corporations and payments made via credit/debit card networks (like PayPal Goods & Services).
Single-member sole proprietorships can be treated as a “person” during the tax filing. In this case, the LLC can be issued a 1099. On the other hand, an LLC that identifies as an S-Corp or C-Corp generally does not receive a 1099 as they are treated as a corporation.
Remember that an audit is not a certainty just because of a missing 1099. However, the IRS receives copies of the same 1099s that you receive so you might receive a notice if they think that you owe additional tax because of the income missing from your tax return.
Independent contractors or vendors, including LLCs and partnerships operating as S or C corporations, do not receive a 1099-NEC or 1099-MISC form. Only unincorporated independent contractors receive these forms. Sellers of freight, merchandise, storage or similar items also do not receive 1099-NEC forms.