1099 Form FAQs

1099 General FAQs

What is the process for correcting paper 1099 forms?

If an error is discovered on a return that has been filed with the Internal Revenue Service, it must be corrected as soon as possible by filing Copy A and Form 1096 with the Internal Revenue Service Center for your area. Follow the detailed instructions provided by the Internal Revenue Service to correct errors. Do not cut or separate Copies A of the 1099 forms that are printed two or three to a page. Submit the entire page even if only one of the forms on the page is completed. Do not submit corrected returns to the Internal Revenue Service if you are only correcting state or local information. Contact the state or local tax department for help with this type of correction. Corrected statements must also be provided to all recipients.

What if corrections are discovered throughout the year that total more than 250 - how do I file them?

The 250 electronic filing threshold is based on the calendar year, not each reporting submission. For example, if an error is discovered and 200 Forms 1099-DIV must be corrected, these filings can be filed either electronically or on paper. If, at a later date, additional errors are discovered and another 150 Forms 1099-DIV must be corrected for the same calendar year, 50 forms from the second batch could be filed on paper; however, the remaining 100 forms must be filed electronically. Any additional 1099-DIV corrections for that particular calendar year would also be required to be filed electronically.

For corrections, does the 250 e-file requirement apply based on the total number of corrections or is it based on form type?

For 1099 forms, the 250 e-file requirement is based on form type. For example, if you have 200 Forms 1099-DIV to be corrected and 200 Forms 1099-INT to be corrected, neither type of form is required to be filed electronically since the number to be corrected is below the 250 e-file threshold for each form type.

Do corrections have to be filed in the same manner that the originals were filed?

Corrections do not have to be filed in the same manner that the originals were filed; however, any filer with 250 or more 1099 form corrections per form type during a calendar year must file them electronically.

Are filing extensions available?

You may request an automatic 30-day filing extension by completing Form 8809, Application for Extension of Time to File Information Returns, and sending it to the address listed on the form. You must file Form 8809 by the due date of the return in order to be granted the extension.

You may request a second 30-day extension by filing another Form 8809 before the end of the first extension period. However, this extension request is subject to review and will not automatically be granted. The Internal Revenue Service will review the request and notify you of its acceptance or denial with a written letter of explanation.

These extensions will only extend the due date for filing returns; you must still provide the 1099 forms to the recipients by the due date. You may request a 30-day extension to furnish the statements to recipients by sending a letter on or before the due date to:

Enterprise Computing Center - Martinsburg
Information Reporting Program
Attn: Extension of Time Coordinator
240 Murall Drive
Kearneysville, WV 25430

Your letter must include:

  • Your name
  • Your taxpayer identification number (TIN)
  • Your address
  • Type of return
  • A statement that your extension request is for providing statements to recipients
  • A reason for delay
  • The signature of the payer or authorized agent

Are Forms 1099 or Form 1096 required to be printed in red drop out ink?

Yes, Copy A of Forms 1099 and Form 1096 must be filed on preprinted red drop out ink forms when filing on paper. All other copies of 1099 forms can be printed in black ink.

Are any perforations required on Forms 1099?

There should be no horizontal perforations separating the Copy A forms on each page. However, 1099 forms must be 8" wide. If the 1099 forms are perforated vertically at 8", the perforated tab must be removed when filing Copy A with the Internal Revenue Service. If you use continuous red drop out ink forms, separate into 11" height pages and remove pin feed strips before filing with the Internal Revenue Service.

Perforations are required between the forms on all other copies of Forms 1099.

1099 Form FAQs

Who needs to file a 1099?

A Form 1099 is used to report a number of different types of information, including taxable income to the Internal Revenue Service. Depending on the type of information being reported, there is a specific 1099 form (e.g. 1099-MISC, 1099-R, etc.) that is required.

What is a Form 1096 and who needs to file this form?

Any person or entity who files a Form 1099 on paper must also include Form 1096, which is used to transmit paper 1099 forms to the Internal Revenue Service. A separate 1096 should be used for each type of 1099 form being submitted.

What is the filing process for Form 1096?

Complete the Form 1096 following the instructions provided by the Internal Revenue Service. Boxes 3, 4 and 5 on Form 1096 should contain the totals from the 1099 forms that are being submitted with it.

Group the 1099 forms by form number and transmit each group with its own Form 1096. For example, if you must file both 1099-DIV and 1099-INT forms, complete one Form 1096 to transmit your 1099-DIV form(s) and another Form 1096 to transmit your 1099-INT form(s). Submit Form 1096 with Copy A of Form(s) 1099 to the Internal Revenue Service.

Reminder: do not staple, paper clip, or tape the forms together as it will interfere with machine reading.

Where do I file Forms 1099?

If filing on paper, Form 1096 should be enclosed with Copy A of 1099 forms and sent to one of the following addresses:

February 28, 2011 - Send Copy A of Form W-2 with Form W-3 to the Social Security Administration:

  • If your principal business, office, agency or legal residence is located in Alabama, Arizona, Arkansas, Connecticut, Delaware, Florida, Georgia, Kentucky, Louisiana, Maine, Massachusetts, Mississippi, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, Texas, Vermont, Virginia, West Virginia, or outside the United States

Mail to:
Department of the Treasury
Internal Revenue Service Center
Austin, TX 73301

  • If your principal business, office, agency, or legal residence is located in Alaska, California, Colorado, District of Columbia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Maryland, Michigan, Minnesota, Missouri, Montana, Nebraska, Nevada, North Dakota, Oklahoma, Oregon, South Carolina, South Dakota, Tennessee, Utah, Washington, Wisconsin, Wyoming

Mail to:
Department of the Treasury
Internal Revenue Service Center
Kansas City, MO 64999

When do 1099 Forms need to be filed?

January 31, 2012 - Generally you must furnish the appropriate copies to each recipient. The due date is extended for Form 1099-MISC to February 15, 2011 if substitute payments are reported in box 8 or gross proceeds paid to an attorney are reported in box 14.

February 28, 2011 - Send Copy A of Forms 1099 with Form 1096 to the Internal Revenue Service.

If you file electronically, the deadline for filing Copy A of Forms 1099 is April 2, 2012.

If I found additional 1099 forms that need filing, do I need a new Form 1096?

If, after you file Forms 1099, you discover additional forms that need to be filed, you must file these forms with a new Form 1096. Do not include copies or information from previously filed returns.

What is a 1099-DIV and who needs to file this form?

Form 1099-DIV is used to report distributions, such as dividends, capital gain distributions, or nontaxable distributions, that were paid on stock and liquidation distributions. A 1099-DIV must be filed by any individual or entity that has:

  • Paid dividends (including capital gain dividends) and other distributions on stock of $10 or more to an individual
  • Withheld and paid any foreign tax on dividends and other distributions on stock for an individual
  • Withheld any federal income tax on dividends under the backup withholding rules for an individual
  • Paid $600 or more as part of a liquidation to an individual

What is the filing process for 1099-DIV?

Complete the information on Form 1099-DIV following the detailed instructions provided by the Internal Revenue Service. Create and distribute the following copies:

  • Copy A - submit to the Internal Revenue Service (on paper or via electronic filing)
  • Copy B - submit to the recipient for his/her federal income tax return
  • Copy C - retain for the payer's records

What is a 1099-INT and who needs to file this form?

Form 1099-INT is used to report interest income. A 1099-INT must be filed by any individual or entity that has:

  • Paid amounts reportable in boxes 1, 3, and 8 of at least $10 (or at least $600 of interest paid in the course of your trade or business as described in the Internal Revenue Service instructions) to an individual
  • Withheld and paid any foreign tax on interest for an individual
  • Withheld (and did not refund) any federal income tax under the backup withholding rules regardless of the amount of the payment for an individual

What is the filing process for 1099-INT?

Complete the information on Form 1099-INT following the detailed instructions provided by the Internal Revenue Service. Create and distribute the following copies:

  • Copy A - submit to the Internal Revenue Service (on paper or via electronic filing)
  • Copy B - submit to the recipient for his/her federal income tax return
  • Copy C - retain for the payer's records

What is a 1099-MISC?

Form 1099-MISC is used to report:

  • Rent or royalty payments
  • Prizes and awards that were not for services, such as winnings on TV or radio shows
  • Payments to crew members by owners or operators of fishing boats, including payments of proceeds from sale of catch
  • Income from non qualified deferred compensation plans
  • Payments to a physician, physician's corporation, or other supplier of health and medical services
  • Payments for services performed for a trade or business by people not treated as its employees; examples: fees to subcontractors or directors and golden parachute payments
  • Fish purchases paid in cash for resale
  • Crop insurance proceeds
  • Substitute dividends and tax-exempt interest payments reportable by brokers
  • Gross proceeds paid to attorneys

Who needs to file a 1099-MISC?

Form 1099-MISC must be filed by any individual or entity that has:

  • Paid at least $10 in royalties or broker payments in lieu of dividends or tax-exempt interest
  • Paid out $600 or more in rents, services (including parts and materials), prizes and awards, other income payments, medical and health care payments, crop insurance proceeds, cash payments for fish (or other aquatic life) purchased from anyone engaged in the trade or business of catching fish, or the cash paid from a notional principal contract (not common) to an individual, partnership, or estate
  • Paid fishing boat proceeds
  • Paid gross proceeds to an attorney

Form 1099-MISC is also used to report direct sales of at least $5,000 of consumer products to a buyer for resale anywhere other than a permanent retail establishment. Lastly, Form 1099-MISC must also be filed for each individual from whom federal income tax has been withheld under backup withholding rules.

What is the process for filing Form 1099-MISC?

Complete the information on Form 1099-MISC following the detailed instructions provided by the Internal Revenue Service. Create and distribute the following copies:

  • Copy A - submit to the Internal Revenue Service (on paper or via electronic filing)
  • Copy B and 2 - submit to the recipient for his/her federal and state (if applicable) income tax returns
  • Copy 1 - submit to the state tax department, if applicable (on paper or via electronic filing)
  • Copy C - retain for the payer's records

What is a 1099-R and who needs to file this form?

Form 1099-R is used to report distributions from retirement or profit-sharing plans, any IRA, insurance contracts, and IRA re-characterizations. A 1099-R must be filed by any individual or entity that has:

  • Made a designated distribution or is treated as having made a distribution of $10 or more from profit-sharing or retirements plans, individual retirement arrangements (IRAs), annuities, pensions, insurance contracts, survivor income benefit plans, permanent and total disability payments under life insurance contracts, charitable gift annuities, etc. for an individual
  • Made reportable disability payments from a retirement plan

Additionally, employers that made death benefit payments that were not made as part of a pension, profit-sharing, or retirement plan must file Form 1099-R.

What is the process for filing a 1099-R?

Complete the information on Form 1099-R following the detailed instructions provided by the Internal Revenue Service. Create and distribute the following copies:

  • Copy A - submit to the Internal Revenue Service (on paper or via electronic filing)
  • Copy B, 2 and C - submit to the recipient for his/her federal, state, city, or local (if applicable) income tax returns and personal records
  • Copy 1 - submit to the state, city or local tax department, if applicable (on paper or via electronic filing)
  • Copy D - retain for the payer's records

What is a 1099-S and who needs to file this form?

Form 1099-S is used to report gross proceeds from the sale and exchange of real estate and certain royalty payments.

Generally, Form 1099-S must be filed by the person responsible for closing the real estate transaction. If no one is responsible for closing the transaction following the detailed instructions provided by the Internal Revenue Service, the person responsible for filing is, in the following order: a) the mortgage lender, b) the transferor's broker, c) the transferee's broker, or d) the transferee.

Transactions that are required to be reported consist in whole or in part of the sale or exchange for money, indebtedness, property, or services of any present or future ownership interest in any of the following:

  • Improved or unimproved land, including air space
  • Inherently permanent structures, including any residential, commercial, or industrial building
  • A condominium unit and its accompanying fixtures and common elements, including land
  • Stock in a cooperative housing corporation

What is the process for filing a 1099-S?

Complete the information on Form 1099-S following the detailed instructions provided by the Internal Revenue Service. Create and distribute the following copies:

  • Copy A - submit to the Internal Revenue Service (on paper or via electronic filing)
  • Copy B - submit to the transferor
  • Copy C - retain for the filer's records

1099 Electronic Filing FAQs

Can I e-file if I have less than 250 1099s?

Yes. In fact, the Internal Revenue Service encourages e-filing as the preferred method of filing all 1099s.

Do I need consent / signatures from payees to e-file?

No. The payer is responsible for reporting the information and for the accuracy of the data, so no signature is required from the payee.

Is e-filing secure?

Yes. The Internal Revenue Service uses Secure Sockets Layer (SSL) communications protocol and 128-bit encryption to ensure data is transmitted securely over the Internet. This is a highly secure standard and is used by government agencies, software developers, and financial institutions.

How do I e-file?

Most software companies work with the Internal Revenue Service to offer a 1099 e-filing option. Refer to your software package for the specific steps to e-file.

How do I know if my submission was accepted?

Depending on the application used, you should retrieve submission statuses either from your software provider or directly from the Internal Revenue Service throughout the filing process. The receipt of your submission will likely be acknowledged with statuses such as "Good", "Bad", or "Not yet processed".

What causes a file to be rejected, and what should I do if my initial submission is rejected?

The Internal Revenue Service does not publish all of the situations that will cause a filing to be rejected. However, some common reasons for rejections are:

  • Invalid Employer Identification Number
  • Incorrect distribution code on the 1099-R
  • The Gross Distribution on the 1099-R is less than the Taxable Amount reported

If you receive a notification indicating that your submission was rejected, you must fix any errors in the form and resubmit the data in the same manner as the original submission. You have 60 days from the date the file was first transmitted to file an acceptable file.

Are there waivers available if I don’t want to and/or can’t e-file? If so, what is the process to apply for a waiver?

If filing electronically would create an undue hardship, the Internal Revenue Service may waive the electronic filing requirement if you can show cause. To request a waiver, you must apply 45 days before the due date of the return using Internal Revenue Service Form 8508--Request for Waiver from Filing Information Returns Electronically. The waiver, if approved, will provide exemption from the electronic filing rule for the current tax year only. You may not apply for a waiver for more than one tax year at a time.

What penalties are associated with 1099 reporting?

If you fail to file a correct 1099 by the due date, and cannot show reasonable cause, you may be subject to a penalty. Penalties apply for:

  • Failing to file on time
  • Failing to include all required information
  • Failing to meet electronic filing requirements
  • Failing to file compliant paper forms
  • Or, failing to include information that is correct

The amount of the penalty is based on when the correct 1099 is filed:

  • $30 per form if filed correctly within 30 days of the due date. The maximum penalty is $250,000 per year ($75,000 for small businesses).
  • $60 per form if filed correctly more than 30 days after the due date but by August 1. The maximum penalty is $500,000 per year ($200,000 for small businesses).
  • $100 per form if you file after August 1 or you do not file the required information returns. The maximum penalty is $1,500,000 per year ($500,000 for small businesses).
  • If failure to file a correct information return is due to intentional disregard or not meeting correct information requirements, the penalty is at least $250 per information form with no maximum penalty

Filing Prior Year 1099s - how do I do this?

If filing on paper, use prior year 1099 forms to report a prior year’s information following the detailed instructions provided by the Internal Revenue Service. For example, file 2010 1099-MISC information on a 2010 1099-MISC form. Note: You must file the prior year 1096 that matches the year of the 1099 forms being filed.

If filing prior year information electronically, follow your software provider’s instructions for filing prior year information.

What are the advantages of filing electronically vs. filing on paper?

Advantages of electronic filing:

  • The deadline for filing Forms 1099 with the Internal Revenue Service is extended by one month, compared to paper filing
  • Paper handling and mailing is reduced
  • Reduced environmental impact
  • Submission status information is provided

Advantages of paper filing:

  • No software or hardware is required
  • Familiar process
  • Little or no technical knowledge required

Is the 250 e-file requirement based on the total number of forms or is it based on form type?

For 1099 forms, the 250 e-file requirement is based on form type. For example, if you must file 200 Forms 1099-DIV and 300 Forms 1099-INT, Forms 1099-DIV do not need to be filed electronically since they do not meet the threshold of 250. However, Forms 1099-INT must be filed electronically since they do meet the 250 threshold.