While there are many issues connected with protecting the employer in dealing with independent contractors, a few important issues exist concerning the issuance of 1099s. As noted by the American Payroll Association (APA) in their January press release, below are the key points of which every employer should take note:
1. Form 1099-MISC is required for noncorporate service providers. Employers must provide a Form 1099-MISC by January 31st to any noncorporate service provider who was paid at least $600 for services during the prior year. Employers must also provide Form 1099-MISC to sole proprietorships, partnerships, attorneys, and medical service providers who do business as corporations.
2. Form 1099-MISC not required if contractor was paid electronically. There is no requirement to send a Form 1099-MISC to any contractor that was paid electronically, such as by credit card, debit card, PayPal, or gift card. The bank or credit card company that made the actual payment to the contractor will send the contractor Form 1099-K....
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Tax Law Updates
DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
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