IBA Compliance Connection

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Do we have to file a 1099-MISC form to report payments to vendors and contractors who provide a service to the bank, such as lawn mowing or painting? Are payments to corporations and to limited liability companies treated as C or S corporations exempt from the 1099-MISC filing requirement? What about when our total payments to a contractor are less than $600 for the year?

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Yes, your bank generally should file a 1099-MISC form for payments to contractors and vendors who provide services to your bank. The IRS requires a 1099-MISC form for each non-employee your bank has paid at least $600 during the year for services performed for your bank. Payments to corporations or limited liability companies treated as C or S corporations generally are excluded from this requirement, subject certain limited exceptions, such as payments to corporations for attorneys’ fees.

For resources related to our guidance, please see:

  • Internal Revenue Code, IRS Information Returns, 26 USC 6041 (“All persons engaged in a trade or business and making payment in the course of such trade or business to another person, of rent, salaries, wages, premiums, annuities, compensations, remunerations, emoluments, or other fixed or determinable gains, profits, and income . . . . of $600 or more in any taxable year . . . shall render a true and accurate return to the Secretary, under such regulations and in such form and manner and to such extent as may be prescribed by the Secretary, setting forth the amount of such gains, profits, and income, and the name and address of the recipient of such payment.”)

  • About Form 1099-MISC, Miscellaneous Income (“File this form for each person to whom you have paid during the year: . . . at least $600 in: . . . services performed by someone who is not your employee . . . .”)

  • 2017 Instructions for Form 1099-MISC (“Exceptions. Some payments do not have to be reported on Form 1099-MISC, although they may be taxable to the recipient. Payments for which a Form 1099-MISC is not required include all of the following. Generally, payments to a corporation (including a limited liability company (LLC) that is treated as a C or S corporation). But see Reportable payments to corporations, later . . . .”)

  • 2017 Instructions for Form 1099-MISC (“Reportable payments to corporations. The following payments made to corporations generally must be reported on Form 1099-MISC. Medical and health care payments reported in box 6. Fish purchases for cash reported in box 7. Attorneys’ fees reported in box 7. Gross proceeds paid to an attorney reported in box 14. Substitute payments in lieu of dividends or tax-exempt interest reported in box 8. Payments by a federal executive agency for services (vendors) reported in box 7.”)