If you make payments in excess of $600 to a worker who is not considered an employee, you must prepare Form 1099-Miscellaneous Income (PDF). Copies of this form must be provided to the worker and the IRS.
The IRS compares the payments shown on the information returns with each recipient's income tax return to see if the payments were reported as income.
Form 1096, Annual Summary and Transmittal of U.S. Information Returns
If Forms 1099 are being sent to the IRS on paper, they must be transmitted with a Form 1096, Annual Summary and Transmittal of U.S. Information Returns (PDF). Form 1096 reflects the totals from all of the Forms 1099-Misc. that you issued. If the Form 1099-Misc. information is being transmitted to the IRS electronically or on magnetic media, a Form 1096 is not required.
Due Dates for Forms 1099-Misc. and 1096
- January 31 - Forms 1099-Misc. must be provided to each income recipient.
- February 28 - Forms 1099-Misc must be submitted to the IRS if you are transmitting on paper or magnetic media. Form 1096 must accompany paper submissions.
- March 31 - Forms 1099-Misc. must be submitted to the IRS if you are transmitting electronically.
Distribution of Form 1099-Misc.
A goes to the IRS
1 goes to the state tax department
B goes to the payment recipient
2 goes to the payment recipient - to be filed with their state income tax return
C goes to the payer