BanditAI
By Charles Hardy | Last updated: Oct 09, 2026
Which vendors get a 1099?
A vendor gets a 1099 when a business pays that vendor for services, rent, or certain other reportable items during the year, and the total reaches the reporting threshold for that form. The vendors most often reportable are:
- Individuals
- Sole proprietors
- Partnerships
- LLCs that provide services, such as freelancers, consultants, tradespeople, cleaning and landscaping providers
- Licensed professionals
A vendor that sells goods, or one that operates as a corporation, generally does not get a 1099. The reporting rule follows the payment, not the label "vendor," so the same vendor can be reportable for one payment and not for another.
Five checks for 1099-eligible vendors
A payment generally requires a 1099 when it passes each of these checks.
| Check | Question | Passes when |
|---|---|---|
| Worker status | Is the vendor an employee? | The vendor is not an employee. Employees receive a W-2 |
| Vendor type | How is the vendor taxed? | The vendor is an individual, sole proprietor, partnership (including LLPs and LPs), or an LLC taxed as either. Corporations, including LLCs taxed as corporations, are generally exempt |
| Payment type | What was the payment for? | Services (including parts and materials), rent, royalties, legal services, or health care services. Not merchandise |
| Business purpose | Was the payment made in the course of the payer’s business? | Yes. Personal payments are not reportable |
| Method and amount | How was the vendor paid, and how much? | Not paid by credit card or payment app, and the yearly total meets the form’s threshold, or any amount if backup withholding applied |
Payments for legal services and medical and health care services are reportable even when the vendor is a corporation.
Vendor types: Who gets a 1099 and who does not
| Vendor type | 1099 generally required? |
|---|---|
| Freelancer, consultant, or independent contractor | Yes |
| Tradesperson or repair vendor | Yes |
| Cleaning, landscaping, or maintenance vendor | Yes, unless incorporated |
| Attorney or law firm | Yes, even if incorporated |
| Medical or health care provider | Yes, even if incorporated |
| Landlord or property owner | Yes, for rent |
| LLC taxed as a sole proprietor or partnership | Yes |
| LLC, S corporation, or C corporation | Generally no |
| Supplier of goods or inventory | No |
| Utility, telephone, freight, or storage provider | No |
| Vendor paid by credit card or payment app | No |
| Foreign vendor | Generally no |
When a vendor’s invoice covers services that include parts and materials, the payment is generally reported in full. A payment made only for merchandise is not reported.
