Who qualifies for 1099 forms?

Q. Who gets 1099 forms for tax purposes?

Adam answers:

The most common use of 1099 forms are those given to non-employees (independent contractors) who earned at least $600 during a calendar year and did not have taxes taken out of the earnings. If your business had an individual do work for you but did not have that person as an employee on a regular basis, and that person earned at least $600, he or she should get a 1099.

The difference between an employee and an independent contractor is crucial, because it affects how an employer can treat taxes. The rules can be tricky, but just as an overview, the IRS considers someone an employee if that person has to come to your place of business on a regular basis, does not have other customers, and has to do work on a schedule specified by you, the employer.

On the other hand, an independent contractor is someone who is called on to work from time to time and may have other clients that they also do work for. Depending on the type of work, an independent contractor may also complete the work away from the employer’s offices on his or her own schedule.

The rules above are just a thumbnail perspective to give you an idea of who qualifies for a 1099 in most cases. There are other types of 1099 forms and reasons to file them as well, such as 1099s that report interest or dividends. See the official IRS 1099-MISC instructions for further information on who needs a 1099 and how to file them.