Quick answer
If you paid an unincorporated vendor $600 or more for services on your rental property in a calendar year, you generally must issue them a Form 1099-NEC and file a copy with the IRS by January 31 of the following year. Payments to a corporation (including an LLC taxed as a C-corp or S-corp) are exempt. Payments routed through a third-party payment processor (Stripe, Square, PayPal Goods + Services) are reported by the processor on Form 1099-K and you do not duplicate the 1099-NEC for the same dollars.
Why landlords face two different 1099 forms
The IRS split the old Form 1099-MISC into two forms starting tax year 2020. Today:
| Form | What it reports | Common landlord use | IRS filing deadline |
|---|---|---|---|
| 1099-NEC | Non-employee compensation. Money paid for services. | You pay your handyman, painter, plumber, lawn-care, or property-management company. | January 31 (paper AND e-file) |
| 1099-MISC | Rents (Box 1), royalties (Box 2), other income (Box 3), attorneys' gross proceeds (Box 10). | A property manager who collects rent on your behalf and disburses to you issues this for the rent passed through. Lawyer payments for eviction work use Box 10. | February 28 (paper) or March 31 (e-file) |
| 1099-K | Payment-card and third-party network transactions. | Stripe, Square, PayPal, Venmo (business). They issue this directly; you do NOT separately issue a 1099-NEC for the same dollars. | January 31 (issued by processor) |
The $600 threshold and who counts
You must issue a 1099-NEC to any single recipient to whom you paid $600 or more in services during the calendar year, in the course of your trade or business. Rental real-estate activity counts as a trade or business for these purposes when you actively manage the property (Treas. Reg. 1.6041-1).
Exemptions:
- Corporations. Payments to a vendor organized as a C-corp or S-corp are generally exempt. The W-9 (below) is how you find out the corporate status.
- Payments by credit/debit card or third-party network. Reported by the processor on 1099-K; do not duplicate.
- Reimbursements for actual expenses documented with receipts (not service charges).
- Goods only. Paying for paint, lumber, or appliances is not "services" and is not reportable.
The W-9: collect it before you pay
Before issuing any payment to a new vendor that might cross the $600 threshold, ask the vendor to complete a current IRS Form W-9 with:
- Legal name (must match the IRS record).
- Business name / DBA (if different).
- Federal tax classification (sole proprietor, partnership, LLC with check box, C-corp, S-corp, etc.).
- Tax Identification Number (SSN for sole proprietor; EIN for entities).
- Certification under penalty of perjury that the TIN is correct.
If the vendor refuses to provide a TIN, you must withhold 24% backup withholding (IRC Sec. 3406) from every payment and remit the withholding to the IRS. The IRS will impose penalties on you, not the vendor, if you fail to start backup withholding when required.
Filing the 1099-NEC
- By January 31 of the year after the payments, you must send Copy B to the recipient and file Copy A with the IRS.
- Paper filing requires Form 1096 as the transmittal cover; the official red-ink Copy A is required (downloaded substitutes do not satisfy the IRS).
- E-filing through the IRS FIRE system or IRIS portal does not require Form 1096. Most landlords use a third-party service (Tax1099.com, Track1099, QuickBooks, etc.) that e-files for $1-4 per form.
- Mandatory e-filing applies if you file 10 or more information returns in aggregate per Treas. Reg. 301.6011-2 (effective tax year 2023).
TIN matching to avoid penalties
Run the vendor's TIN through the IRS TIN-Match program (or your filing vendor's equivalent) before you file. If the TIN does not match the IRS record, you face a penalty under IRC Sec. 6722 (currently up to $310 per return for tax year 2024). The TIN-Match system is free; your filing vendor usually rolls it in.
State 1099 filing
Many states require a copy of the federal 1099-NEC for state income-tax purposes. Some states (California FTB 1099 substitute filing program) accept the federal copy via the Combined Federal/State Filing Program (CF/SF); others (New York, New Jersey, Massachusetts, Pennsylvania) require a separate state submission. Verify with your state's Department of Revenue or your CPA.
Penalties
| Failure | Per-return penalty (TY2024) | Cap (large filers) |
|---|---|---|
| File within 30 days of due date | $60 | $232,500 |
| File more than 30 days late but by Aug 1 | $120 | $697,500 |
| File after Aug 1 (or not at all) | $310 | $3,532,500 |
| Intentional disregard | $630 (no cap) | No cap |
For small filers (gross receipts $5M or less) the caps are roughly 1/3 of the figures above.
What Rentari.ai does for you
Rentari.ai stores every vendor payment with the payee's TIN (where you have collected it via the in-platform W-9 capture) and exports a year-end 1099 worksheet you can hand to your filing service. Accounting, Tax1099, and QuickBooks integrations close the loop. We do not (and will not) act as your filing agent for 1099 transmission, because that would require us to take on the substitute-Copy-A controls the IRS expects from authorized filers.
This is a plain-language reference, not tax advice. The IRS publishes the controlling instructions for Forms 1099-NEC and 1099-MISC each year; consult a CPA or enrolled agent for advice about your specific filing obligations.