Limited Liability Companies (LLCs) offer great flexibility and legal protection, making them a popular choice for freelancers, independent contractors, and small business owners. However, the question, “Do LLCs get 1099 forms?” often sparks confusion. The answer depends largely on how your LLC is taxed—whether as a sole proprietorship, partnership, or corporation. 

In this guide, we’ll break down the tax rules for LLCs, including single-member LLCs, partnerships, and S or C corps, to help you understand when 1099 forms apply and how to stay compliant with IRS regulations.

What Is an LLC?

A Limited Liability Company (LLC) is a versatile business structure that combines the simplicity of a sole proprietorship with the liability protection of a corporation. Entrepreneurs and independent contractors often choose LLCs because they shield personal assets from business liabilities while offering operational flexibility.

However, the tax treatment of LLCs varies based on their classification, directly influencing whether they receive 1099 forms. To navigate this complexity, let’s explore the types of LLCs and how their tax status impacts 1099 issuance.

Do LLCs Get 1099?

The short answer is that it depends on how your LLC is taxed. Here’s how each classification works:

Single-Member LLCs

If you’re the sole owner of your LLC, the IRS treats it as a “disregarded entity.” This means the LLC’s income and expenses are reported on your personal tax return using Schedule C. Single-member LLCs are subject to self-employment taxes, and if you earn $600 or more from a client, you’ll likely receive a 1099-NEC.

Example: If you’re a freelance graphic designer operating as a single-member LLC and a client pays you $1,000, they are required to issue you a 1099-NEC.

LLC Partnerships

An LLC with multiple owners is taxed as a partnership by default. Partnerships file Form 1065 to report business income and issue a Schedule K-1 to each partner for their share of income or loss. Like single-member LLCs, partnerships must also report self-employment income, and they will receive 1099 forms for qualifying transactions over $600.

Key Insight: If your LLC is a partnership and works with a client who pays $2,000, expect a 1099-NEC or 1099-MISC, depending on the nature of the payment.

LLCs Taxed as S Corporations

If your LLC elects to be taxed as an S corporation, things change significantly. S corps avoid self-employment taxes on certain earnings, and the IRS does not require businesses to issue 1099s to LLCs taxed as S corporations.

Tip: To verify if an LLC is taxed as an S corp, businesses request a Form W-9, which includes the LLC’s tax classification.

LLCs Taxed as C Corporations

Like S corporations, LLCs taxed as C corporations are typically exempt from receiving 1099 forms. The IRS assumes that corporations already handle their own detailed tax reporting, making 1099s unnecessary except for specific exceptions, such as legal or medical services.

Do LLC Partnerships Get 1099?

Partnership LLCs receive 1099 forms when they meet these conditions:

  • Payment Threshold: A client or vendor pays $600 or more during the year.
  • Tax Classification: The LLC is not taxed as an S or C corporation.

Partnership income is reported on each partner’s personal tax return via Schedule K-1, but the partnership itself must file Form 1065 to declare its total earnings and expenses.

Example: If your LLC partnership provides consulting services to a company for $800, you’ll receive a 1099-NEC reflecting this income.

Do LLC S Corps Get 1099?

LLCs taxed as S corporations are exempt from receiving 1099 forms for most transactions. This exemption exists because S corps must already report payments and distributions on their corporate tax returns. Businesses issuing payments to LLCs taxed as S corps can confirm this status through a completed Form W-9.

Important Note: Although S corp LLCs don’t receive 1099 forms, it’s still crucial for these entities to maintain detailed financial records to ensure compliance during tax season.

Do Single-Member LLCs Get a 1099?

Yes, single-member LLCs receive 1099 forms if they meet the payment threshold of $600 or more. Since the IRS views single-member LLCs as disregarded entities, they are treated similarly to sole proprietors. This means clients or vendors issuing payments to you must file a 1099-NEC for non-employee compensation.

Example in Action:
You’re a freelance writer running a single-member LLC. A client pays you $5,000 for your work throughout the year. They’ll issue you a 1099-NEC detailing the income so you can report it on your tax return.

Do LLCs Get 1099-NEC?

Yes, LLCs taxed as sole proprietorships or partnerships receive 1099-NEC forms for non-employee compensation. Introduced in 2020, the 1099-NEC replaced the 1099-MISC for reporting freelance and contractor payments.

Here’s when LLCs typically receive a 1099-NEC:

  • The LLC provides services (not goods).
  • The payment exceeds $600 in a tax year.
  • The LLC is not taxed as an S or C corporation.

When to Issue a 1099 as a Business Owner

If you run a business, you may need to issue 1099 forms to LLCs you’ve hired. Whether you’re paying for freelance work, consulting services, or other professional contributions, the IRS requires you to report payments of $600 or more. However, determining whether an LLC should receive a 1099 depends on its tax classification.

Steps to Determine If You Need to Issue a 1099:

Request a Form W-9: Before making any payments to an LLC, request a completed Form W-9. This document provides the LLC’s tax classification and Taxpayer Identification Number (TIN).

Check the Tax Status:

  • If the LLC is taxed as a sole proprietorship or partnership, you must issue a 1099-NEC or 1099-MISC for qualifying payments.
  • If the LLC is taxed as an S corp or C corp, you generally don’t need to issue a 1099 unless specific exceptions apply.

File the Correct Form: Ensure you use the correct form to report the type of payment:

  • 1099-NEC: For non-employee compensation, such as services performed by a contractor.
  • 1099-MISC: For other payments, including rent, prizes, and legal fees.

Example of Issuing a 1099:

You hired a graphic designer whose LLC is taxed as a sole proprietorship. Over the year, you paid them $3,000 for their services. Based on their W-9, you know their LLC qualifies to receive a 1099-NEC. You’ll issue this form by January 31 to report the payments.

Do LLC C Corps Get 1099?

In most cases, LLCs taxed as C corporations do not receive 1099 forms. This is because corporations are required to report their income directly to the IRS through corporate tax returns, making additional reporting via 1099s unnecessary.

Exceptions to the Rule:

There are specific circumstances where an LLC taxed as a C corp may still receive a 1099:

  • Legal Services: Payments for legal services require a 1099, regardless of the LLC’s tax classification.
  • Medical Services: Payments for medical and healthcare services also require a 1099, even if the LLC is taxed as a corporation.

For most other services, however, LLCs taxed as C corporations are exempt.

Key Takeaways for LLC Owners

LLCs and 1099 Forms Depend on Tax Status: Whether you receive or issue a 1099 depends on how your LLC is taxed.

  • Single-member LLCs and partnerships typically receive 1099 forms.
  • S corp and C corp LLCs are usually exempt unless exceptions apply.

Clients Need Your W-9: Providing your clients with an up-to-date Form W-9 ensures they know your tax classification and can issue 1099s appropriately.

Keep Detailed Records: Regardless of whether you receive a 1099, maintaining accurate records of your income and expenses is critical for proper tax filing.

Final Thoughts

Understanding whether your LLC gets a 1099 is essential for tax compliance. Whether you're a single-member LLC, a partnership, or an S or C corp, knowing the rules can help you navigate tax season with confidence. Always consult a tax professional for personalized advice to ensure your business stays compliant and takes full advantage of applicable tax benefits.