Does the vendor get a 1099? (from W-9 line 3a)
Step 1
C corp or S corp
Generally no, unless legal, attorney or medical payments.
Step 2
LLC marked C or S
Same as a corporation: generally no.
Step 3
LLC marked P / partnership
Yes, at the year’s threshold.
Step 4
Individual / sole proprietor / single-member LLC
Yes, at the year’s threshold.
The steps, in plain language
- 1
Get the vendor’s W-9 first
Ask for a signed Form W-9 before the first payment. Line 3a is where the vendor states its federal tax classification, and that is what decides the 1099 question. See the W-9 form guide for a request email.
- 2
Corporation or S corporation box checked: generally no 1099
The IRS instructions say payments to a corporation, including an LLC treated as a C or S corporation, are generally not reportable on Form 1099-NEC or 1099-MISC.
- 3
LLC box checked: read the letter
An LLC that is not disregarded checks “Limited liability company” and writes C (C corporation), S (S corporation) or P (partnership). C or S: treat it as a corporation, generally no 1099. P: treat it as a partnership, which is reportable.
- 4
Single-member LLC: look at the owner
By default the IRS disregards a one-member LLC, so it checks the box for its owner’s classification and puts the owner’s name on line 1 and the LLC’s name on line 2. If the owner is an individual (individual/sole proprietor box), the payments are reportable to the owner, using the owner’s SSN or EIN.
- 5
Multi-member LLC: usually a partnership
A domestic LLC with two or more members is a partnership by default, so it is reportable unless it has elected to be taxed as a corporation (Form 8832) or an S corporation (Form 2553) and says so on line 3a.
- 6
Check the exceptions before you exclude a corporation
Payments for legal services (attorneys’ fees, 1099-NEC) and gross proceeds paid to an attorney (1099-MISC box 10) are reportable even when the law firm is a corporation. So are medical and health care payments (1099-MISC box 6), cash payments for fish bought for resale, and certain substitute payments in box 8.
- 7
Apply the threshold and the payment method
For payments made in 2026, report once the vendor’s total reaches $2,000 ($600 for attorney gross proceeds, $10 for royalties). Payments made by credit card or through a third-party payment network are reported on Form 1099-K by the processor, not by you.
Track it in Aequo AP
Tax details live in Settings › Tax & 1099. Aequo AP keeps the W-9 status and 1099 flag per vendor; it does not decide reportability for you.
- 1
Request the W-9
In Settings › Tax & 1099, under Vendor Tax Information, use the Request W-9 button (the envelope icon) on the vendor’s row. The vendor gets an email with a secure link to submit its W-9 details online, and the W-9 Status changes to Received when it does.
- 2
Set 1099 Eligible
Based on the classification on the W-9 and what you pay the vendor for, set 1099 Eligible for reportable vendors, including corporations you pay for legal or medical services.
- 3
Keep tax IDs protected
Tax IDs are encrypted at rest and shown masked to the last four digits; only Owners and Admins can reveal one, and every reveal is logged.
- 4
At year-end
Under 1099 Forms, use Generate Drafts to create draft 1099-NEC or 1099-MISC records for eligible vendors, review them, then Mark Ready and Mark Filed.
Common mistakes
- Assuming every LLC is exempt. Only LLCs taxed as a C or S corporation are generally exempt.
- Excluding a law firm because it is incorporated. Legal fees and attorney gross proceeds are reportable to corporations.
- Using the single-member LLC’s name and EIN on the 1099 when the W-9 names the owner on line 1.
- Reporting card or payment-app payments on a 1099-NEC; the processor reports them on Form 1099-K.
Frequently asked questions
Does an LLC get a 1099?
It depends on how the LLC is taxed. A single-member LLC that is a disregarded entity, or an LLC taxed as a partnership, generally gets a 1099-NEC or 1099-MISC once payments reach the threshold ($2,000 for 2026 payments). An LLC taxed as a C or S corporation generally does not, except for legal, attorney and medical payments.
Do S corps get a 1099?
Generally no. The IRS exempts payments to corporations, including S corporations and LLCs treated as S corporations, from Form 1099-NEC and 1099-MISC reporting. The exceptions are payments for legal services, gross proceeds paid to an attorney, and medical and health care payments, among a few others.
Do I send a 1099 to a C corporation?
Generally no, for the same reason as an S corporation. If the C corporation is a law firm you pay for legal services, or a provider of medical or health care services, you do.
Do attorneys get a 1099 even if they are a corporation?
Yes. The IRS instructions say the exemption for payments to corporations does not apply to payments for legal services. Attorneys’ fees go on Form 1099-NEC, and gross proceeds paid to an attorney (for example a settlement paid to a claimant’s attorney) go on Form 1099-MISC box 10, which has a $600 threshold.
How do I know how an LLC is taxed?
Ask for its Form W-9. On line 3a, a disregarded single-member LLC checks its owner’s box, and other LLCs check “Limited liability company” and enter C, S or P. If line 3a is blank or unclear, ask the vendor for a corrected W-9.
Who needs a 1099?
Generally, individuals, sole proprietors, partnerships and LLCs that are not taxed as corporations, when you pay them for services, rent or other reportable payments in the course of your business and the total reaches the threshold for the year: $2,000 for payments made in 2026.
Does a single-member LLC get a 1099 in its own name?
The 1099 goes to the owner. The W-9 instructions say a disregarded entity enters the owner’s name on line 1 and the LLC’s name on line 2, and gives the owner’s SSN (or EIN, if the owner has one).
Try it in Aequo AP
Aequo AP captures invoices, matches them to purchase orders and delivery notes, routes approvals and flags exceptions and duplicates, then syncs approved bills with QuickBooks Online, Xero, FreshBooks or Zoho Books.
Related guides and tools
Sources
Third-party steps follow the vendor’s own help pages. Menus change; check the current page if a label differs.
- IRS, Instructions for Forms 1099-MISC and 1099-NEC (Rev. December 2026) — payments to corporations, including LLCs treated as C or S corporations, generally not reportable; exceptions for legal services, medical and health care payments, attorney gross proceeds, fish purchases and box 8; $2,000 threshold; 1099-K for card payments. Fetched 24 October 2026.
- IRS, Form W-9 (Rev. March 2024) — line 3a classification table (LLC with C, S or P; Forms 8832 and 2553); disregarded entity name and TIN rules. Fetched 24 October 2026.
- IRS, Limited liability company (LLC) (last reviewed 10 October 2026) — default classification: one member disregarded, two or more members a partnership; Form 8832 election. Fetched 24 October 2026.
- IRS, Form 1099-K FAQs, Q21 (last reviewed 18 May 2026) — $2,000 threshold for 1099-MISC and 1099-NEC for payments after December 31, 2025. Fetched 24 October 2026.