Tax · 6 min read
1099 Contractor Checklist for Small Businesses
If you paid an unincorporated contractor $600 or more for services during the year, you almost certainly owe them — and the IRS — a 1099-NEC by January 31.
Who needs a 1099-NEC
- U.S. individuals, sole proprietors, partnerships, and most LLCs
- Paid $600+ for services during the calendar year
- Paid via cash, check, or ACH (NOT credit card or PayPal — the processor reports those on a 1099-K)
Who is usually exempt
- C-corporations and S-corporations (except attorneys)
- Payments for products only
- Payments made through a credit card or third-party platform
