Whether you send a 1099 to an LLC depends on the LLC's tax structure, not its legal form

An LLC is a legal structure, but it does not determine tax filing on its own. The IRS taxes LLCs based on how they choose to be taxed — as a sole proprietorship, partnership, S corporation, or C corporation. You send a 1099 only if the LLC is taxed as a sole proprietorship or partnership and you paid it more than $600 for services during the year. If the LLC elected to be taxed as a corporation, you do not send a 1099 regardless of the amount paid.

The LLC owner or the business itself will tell you how they are taxed if you ask directly. You can also check IRS Form 8832 (Entity Classification Election) or Form 2553 (Election by a Small Business Corporation), which the LLC files to choose its tax treatment. If you cannot confirm the tax structure and the LLC is the only owner, assume it is taxed as a sole proprietorship and send the 1099 if you paid more than $600.

Key Takeaways

  • Send a 1099-NEC or 1099-MISC to an LLC taxed as a sole proprietorship or partnership if you paid it more than $600 for services in a calendar year.
  • Do not send a 1099 to an LLC taxed as an S corporation or C corporation, even if you paid thousands of dollars.
  • An LLC's tax structure is chosen by the owner or owners, not determined by the LLC designation itself.
  • If you do not know the LLC's tax structure, ask the business directly or request their tax identification number and confirmation of how they are taxed.
  • You must send the 1099 to the IRS and the LLC by January 31 of the year following payment.

LLCs taxed as sole proprietorships or partnerships require a 1099

A single-owner LLC that has not filed an election with the IRS is taxed as a sole proprietorship by default. A multi-owner LLC that has not filed an election is taxed as a partnership by default. In both cases, if you paid the LLC more than $600 for services — not for goods, and not for rent or royalties unless specific conditions explore — you must send a 1099-NEC (for non-employee compensation) or 1099-MISC (for miscellaneous income) to both the IRS and the LLC.

The threshold is $600 per calendar year, not per transaction. If you paid an LLC $300 in March and $400 in November, that totals $700 and triggers the 1099 requirement. If you paid $600 exactly, you must send the form. If you paid $599, you do not.

The form you use depends on the type of work. Use 1099-NEC for non-employee compensation — work performed by an independent contractor. Use 1099-MISC for other income like prizes, awards, or certain payments to professionals. Most service payments to LLCs use 1099-NEC.

LLCs taxed as corporations do not receive a 1099

An LLC can elect to be taxed as an S corporation or C corporation by filing Form 8832 or Form 2553 with the IRS. When an LLC makes this election, it is treated like a corporation for tax purposes. You do not send a 1099 to a corporation, regardless of how much you paid it. Instead, you report the payment as a business expense on your own tax return.

This is one reason some LLC owners choose corporate tax treatment: they avoid the 1099 reporting requirement. However, corporate taxation has other consequences, including self-employment tax rules and filing requirements, so the choice is not made solely for 1099 purposes.

How to find out an LLC's tax structure

Ask the LLC directly. A straightforward question — "How is your LLC taxed for federal income tax purposes?" or "Did you elect corporate taxation?" — will get you a clear answer. Most business owners know their tax structure because it affects their own filing.

If the LLC does not respond or you need written confirmation, request their Employer Identification Number (EIN) and ask them to confirm in writing whether they are taxed as a sole proprietorship, partnership, S corporation, or C corporation. You can also ask to see a copy of Form 8832 or Form 2553 if they have filed one.

If you genuinely cannot determine the structure and the LLC has a single owner, treat it as a sole proprietorship and send the 1099 if the $600 threshold is met. This is the safest default because most single-owner LLCs do not elect corporate taxation.

Reporting requirements and important date

If you must send a 1099 to an LLC, you have two filing obligations. First, send a copy to the LLC by January 31 of the year following the payment. Second, send a copy to the IRS (along with a transmittal form, usually Form 1096) by the same date. The IRS important date is firm; late filing can result in penalties.

You will need the LLC's legal name, EIN, and mailing address to complete the form. The EIN is a nine-digit number that looks like XX-XXXXXXX. If you do not have it, ask the LLC or look it up on the IRS website if the business is registered there.

File the 1099 for the year in which you made the payment, not the year in which you received an invoice or the LLC invoiced you. If you paid an LLC in December 2024, the 1099 is filed in January 2025 and reports 2024 income.

What happens if you send a 1099 to the wrong entity type

If you send a 1099 to an LLC taxed as a corporation, the LLC will likely ignore it or report the discrepancy to the IRS. The IRS may then contact you to correct the filing. Sending an unnecessary 1099 is not a criminal offense, but it creates confusion and can delay the LLC's tax processing.

If you fail to send a 1099 to an LLC taxed as a sole proprietorship or partnership when you should have, the IRS may assess penalties against you. The penalty for not filing a 1099 is $50 per form if the failure is discovered, though the IRS may waive penalties if you correct the error within a reasonable time.

Frequently Asked Questions

Does an LLC always need a 1099?

No. An LLC needs a 1099 only if it is taxed as a sole proprietorship or partnership and you paid it more than $600 for services. If the LLC is taxed as a corporation or you paid less than $600, no 1099 is required.

What if I paid an LLC for a product, not a service?

Payments for goods are not reported on a 1099-NEC. If you purchased inventory or products from an LLC, you do not send a 1099 even if the amount exceeds $600. The 1099 requirement applies to services and certain other types of income, not product sales.

Can an LLC refuse to give me its tax structure information?

An LLC cannot legally refuse to provide its EIN or tax classification if you request it for 1099 purposes. If an LLC refuses, you can report the business to the IRS or file the 1099 based on the default tax structure (sole proprietorship for a single owner, partnership for multiple owners).

Do I need to send a 1099 if I paid an LLC by credit card?

If you paid by credit card, the credit card processor may issue a 1099-K to the LLC instead. However, you still have your own 1099 reporting obligation if you paid more than $600 for services. Check with your payment processor to understand who is responsible for reporting in your situation.

What if the LLC gave me a W-9 form?

A W-9 means the LLC is confirming it is not a corporation and wants to receive a 1099. Complete the W-9, keep it on file, and send the 1099 if you paid more than $600. The W-9 also provides the LLC's EIN and legal name, which you will need for the 1099 form.