Does an S Corp Get a 1099? What Owners and Their Clients Need to Know
Short answer: usually not. Payments to a corporation, and that includes an S corporation, are generally left off Form 1099-NEC and Form 1099-MISC. There are a few exceptions, though, and they catch people every January.
This post covers when an S corp should expect a 1099, when it has to send them, and what to do when a client sends you one anyway.
Why S corps are usually left off 1099s
The IRS rules for Forms 1099-NEC and 1099-MISC say that payments to a corporation generally don’t need to be reported. The rule doesn’t care whether the corporation is a C corp or an S corp. It also covers an LLC that has elected to be taxed as an S corp, because for federal tax purposes that LLC is treated as a corporation.
So if you run a consulting business as an S corp and a client pays you $40,000 this year, that client usually doesn’t owe you a 1099. You still report every dollar of that income on your S corp’s return, Form 1120-S. The 1099 is only an information form. Not getting one never makes income tax-free.
The exceptions: when an S corp does get a 1099
Some payments have to be reported even when they go to a corporation. Per the IRS instructions for Forms 1099-MISC and 1099-NEC, the main ones for small businesses are:
- Legal fees. Payments for an attorney’s services are reported on Form 1099-NEC even if the law firm is incorporated. Gross proceeds paid to an attorney, such as a settlement passed through the firm, go on Form 1099-MISC.
- Medical and health care payments. If your S corp is a medical, dental, therapy or other health care practice, the businesses that pay you for those services report them on Form 1099-MISC.
- A few narrower items, such as cash paid for fish bought for resale and substitute payments in lieu of dividends.
If your S corp is a law firm or a medical practice, expect 1099s even though you’re incorporated. Everyone else can generally expect very few.
The 1099 most S corps do get: Form 1099-K
Form 1099-K is a different form with different rules. Card processors and payment apps, the companies that handle your card or online payments, send it to report what they processed for you. There’s no corporate exception, so an S corp can receive one.
Under the 2025 federal tax law, the 1099-K reporting threshold for payment apps and online marketplaces went back to more than $20,000 and more than 200 transactions in a year. Card processors report regardless of volume. If you take card payments through Square, Stripe or a merchant account, you’ll likely see a 1099-K. Make sure the gross amount on it matches your books, because refunds and fees are not taken out of that figure.
What changed for 2026: the $2,000 threshold
For payments made in 2026, the threshold for most 1099-NEC and 1099-MISC reporting rises from $600 to $2,000, and it can be adjusted for inflation starting in 2027. That matters more for the 1099s your S corp sends than for the ones it receives.
Does your S corp have to send 1099s?
Yes. Being a corporation exempts you from receiving most 1099s. It does not exempt you from sending them. If your S corp pays an individual contractor, a sole proprietor or a single-member LLC that isn’t taxed as a corporation $2,000 or more for services in 2026, you owe them a Form 1099-NEC.
Forms 1099-NEC are due to recipients and the IRS by January 31. For 2026 payments that date falls on a Sunday, so check the IRS calendar for the exact due date.
The simplest way to stay on top of it is to collect a Form W-9 from every vendor before you pay them. The W-9 tells you whether the vendor is a corporation, a partnership or an individual, and that answer decides whether they get a 1099.
Paying another S corp
When your S corp hires a vendor that is itself an S corp, the same corporate exception works in your favor. You generally don’t send them a 1099-NEC unless you’re paying them for legal or medical services. Their W-9 is your proof. Keep it on file, because if the IRS ever asks why a vendor didn’t get a 1099, “they told us they were a corporation” only holds up with the form to back it.
Many small businesses skip the W-9 step and end up guessing in January. A short habit fixes it: no W-9, no first payment. Most bookkeeping software can store the form with the vendor record, so it’s there when 1099 season comes around.
How to tell your clients you’re an S corp
When a client asks for your W-9, check the “S Corporation” box under federal tax classification. If you’re an LLC taxed as an S corp, check “LLC” and enter “S” as the tax classification. A correctly filled-out W-9 is usually all it takes to stop unnecessary 1099s from showing up.
What if you get a 1099 you shouldn’t have?
It happens all the time, and it’s rarely a problem. Some businesses send 1099s to everyone to be safe. A few steps keep it clean:
- Make sure the amount matches what you were paid. If it’s wrong, ask the payer for a corrected form.
- Make sure it shows your business’s name and EIN, not your personal name and Social Security number. Income reported under your SSN can trigger an IRS letter if it doesn’t appear on your personal return.
- Report the income on Form 1120-S as you normally would. Don’t report it twice.
Quick reference
| Payment to your S corp | Do you get a 1099? |
|---|---|
| Regular business services (consulting, construction, design) | Usually no |
| Legal services from an incorporated law firm | Yes, Form 1099-NEC |
| Medical or health care services | Yes, Form 1099-MISC |
| Card and payment app sales | Often, Form 1099-K |
| Rent paid to your S corp | Usually no |
FAQ
Does an LLC taxed as an S corp get a 1099?
Generally no. An LLC that has elected S corp status is treated as a corporation for federal tax purposes, so the same corporate exception applies. Legal and medical payments are still reported.
Do S corp owners get a 1099 for their distributions?
No. Shareholders get a Schedule K-1 from the S corp’s Form 1120-S. Your salary from the S corp is reported on a W-2.
Can I ask a client to stop sending me a 1099?
You can send them a W-9 showing your S corp status. If they send one anyway, report the income once on the S corp return and keep the form with your records.
Need help sorting out your 1099s?
Epsilon Accounting Solutions helps S corp owners in Edmond, Oklahoma City and across Oklahoma with bookkeeping, 1099 filing and S corp tax returns. Call us at (405) 458-8949 or book a time on our contact page before January gets busy.