Generating the 1099-MISC

As part of your non-employee on-boarding process, you should have them complete and return a W-9. This form provides you with the non-employee’s tax identification number, mailing address and other important information, allowing you to fill out your payments and government reporting forms accurately.

Generating a 1099-MISC is straight forward, but be sure to be accurate – the IRS can impose significant penalties for incorrectly filed forms. Both the paper and electronic forms can easily be filled out following the included instructions.

For quick reference the items for the 1099-MISC are tabulated below.

ItemDescription
LabelPayer's name, address, and phone number. Payer is the business paying the non-employee
Payer's federal identification numberThis is the business TIN or the sole-proprietor's SSN
Recipient's identification numberThis the non-employee's SSN, or TIN if being paid as a business entity
Recipient's nameName associated with the SSN or TIN of the non-employee
Street AddressNon-employee's street address
City, State, and ZipNon-employee's geographical address
Account numberUse to distinguish multiple 1099-MISCs for the same non-employee
FATCA filing requirementCheck only if the 1099 is required for compliance with the Foreign Account Compliance Act
2nd TIN not.Check only if the IRS has notified you twice in the last 3 years that the non-employee has provided incorrect TIN information
Box 1 RentsEnter amounts of $600 or more for all types of rents
Box 2 RoyaltiesEnter gross royalty payments of $10 or more before reduction of severance and other taxes have been paid
Box 3 Other IncomeEnter other income of $600 or more not reported elsewhere on the form, including prizes and the fair market value of awards, termination payments to former self-employed sales persons, punitive damages or damages for nonphysical injuries or sickness
Box 4 Federal income tax withheldEnter backup withholdings withheld from non-employees
Box 5 Fishing boat proceedsEnter the individual's share of all proceeds from the sale of a fishing catch, and the cash payments of up to $100 per trip contingent on minimum catches
Box 6 Medical and health paymentsEnter payment of $600 or more to each physician or other supplier or provider of health care services
Box 7 Non-employee CompensationEnter non-employee compensation of $600 or more, including reimbursable expenses for materials, supplies, or sub-contractors
Box 8 Substitute payments in lieu of dividends or interestEnter aggregate payments of at least $10 received by a broker or customer in lieu of dividends or tax-exempt interest
Box 9 Payer made direct sales of $5,000 or more of consumer products to a buyer for resaleCheck if you made a sale of $5,000 or more for consumer products on a buy-sell, deposit-commission, or other commission basis for resale
Box 10 Crop insurance proceedsEnter crop insurance proceeds of $600 or more paid to farmers by insurance companies
Box 11leave blank
Box 12leave blank
Box 13 Golden parachute paymentsEnter any excess golden parachute payment
Box 14 Gross proceeds paid to an attorneyEnter gross proceeds of $600 or more paid to an attorney in connection with legal services
Box 15a Section 409A deferralsOptional. Enter the total amount deferred during the year of at least $600 for the non-employee under nonqualified plans
Box 15b Section 409 A IncomeEnter all deferred amounts; see IRS Bulletin 2008-52
Box16 State tax withheldIf filing with state - enter amount of state tax withheld for non-employee
Box 17 State Payer's state no.If filing with state - enter the payer's state tax identification number
Box 18 State incomeIf filing with state - enter the amount of the non-employee's total compensation or payments that may be attributed to said state