1099-NEC Exceptions: Who You Don't Need to Send One To

October 17, 2026 · 2 min read

General information, not tax, legal or financial advice. We are not the IRS. Check IRS.gov or a qualified tax professional. Sources read on October 17, 2026. Dates and amounts after 2026 are expected. Examples use made-up numbers. This page contains no affiliate links.

Short answer: The IRS instructions say some payments don't need a Form 1099-NEC even though they may be taxable to the recipient. The first exception: generally, payments to a corporation, including an LLC treated as a C or S corporation. But some payments to corporations must still be reported (below).

Exceptions listed in the instructions

• Payments to a C- or S-corporation (including an LLC taxed as one), but see the carve-outs.
• Payments for merchandise, telegrams, telephone, freight, storage and similar items.
• Rent paid to real estate agents or property managers (they report rent paid to owners on Form 1099-MISC).
• Wages, bonuses, prizes and awards paid to employees (Form W-2) and business travel allowances to employees.
• Payments to a tax-exempt organization, the United States, a state, D.C., a U.S. territory or a foreign government.
• State or local sales taxes charged to you by the provider (not reported), except taxes imposed on the provider and paid to them (reported as part of the payment).
• Scholarships and fellowship grants, canceled debt (Form 1099-C), employee business expense reimbursements, and certain other items listed in the IRS text.

Carve-outs: corporations you must still report

• Attorneys' fees (box 1a), even to a corporation.
• Payments by a federal executive agency for services (vendors), including to corporations.

Four conditions for NEC (instructions)

Payment to someone who is not your employee; for services in the course of your trade or business; to an individual, partnership, estate or, in some cases, a corporation; and at least $2,000 during the year (threshold for 2026 as read; see threshold page). Backup withholding in box 4 requires a form regardless of the amount.

How to know if an LLC is taxed as a corporation

Ask for a Form W-9 (W-9 page); don't guess from the name.

FAQ

Do I send one to my accountant's corporation?

Generally not, unless an exception above applies; attorneys are different.

Do I still need a W-9?

Collecting one is how you document status; see the W-9 page.

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