1099-MISC Rules

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Form 1099-MISC is designed to report income for individuals and companies who have been paid a certain amount of money in various categories as determined by the Internal Revenue Service (IRS), according to the University of California Los Angeles. Like most governmental forms, there are rules and exceptions to the Form 1099-MISC regulations. There are also specific instances that employers should be aware of before filing a Form 1099-MISC.

Reasons to File

The IRS requires that you file a Form 1099-MISC for each person you have paid at least $10 in royalties or broker payments over the course of the year in which you are filing. If you have paid $600 in rents, services, prizes and awards, medical and healthcare payments or more you must also file the 1099-MISC. In addition to the list of filing rules for the 1099-MISC, any fishing-boat proceeds and gross proceeds to an attorney must be filed on this form, according to the IRS.


The IRS does not require a Form1099-MISC if the aforementioned payments were to a corporation or payment of rent to real-estate agents. Wages paid to employees and business travel allowances paid to employees do not need to be documented on the 1099-MISC, according to the IRS. Also, the cost of current life insurance does not qualify as a reason to file Form 1099-MISC.

Deceased Employee's Wages

If an employee passes away, the employer must report the accrued wages, vacation pay and other compensation paid after the death of the employee on Form 1099-MISC. The employer must also report any and all payments made to the estate or beneficiary of the deceased, according to the IRS.

If payment is made within the same calendar year as the employee’s death, the employer must withhold Social Security and Medicare, which will be reported as taxes on the W-2 Form.


About the Author

Mary Beth Swayne is a freelance writer whose work has appeared in newspapers including the Greater Philadelphia Newspaper network. She has also written for seven magazines and non-profit organization publications. She holds a Bachelor of Arts in English from Pennsylvania State University.

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