Entity eligibility guide
Do S Corps Get a 1099? The Rule and Its Exceptions
Generally, S corporations do not receive Form 1099-MISC or Form 1099-NEC for many ordinary business payments because the corporate exemption applies. Review is still required for listed exceptions, including attorneys' fees, gross proceeds paid to attorneys, medical and health care payments, cash purchases of fish for resale, substitute payments, and certain federal executive agency payments. Payment method and payment year also matter. Credit card and qualifying third-party network transactions generally follow Form 1099-K reporting, while affected thresholds moved from $600 for 2025 payments to $2,000 for 2026 payments. Sources: IRS Instructions for Forms 1099-MISC and 1099-NEC and Public Law 119-21, section 70433. This page supports firm review workflows and is not tax or legal advice.
Who this page is for
Accounting teams reviewing vendor W-9 classifications and payment records before a qualified reviewer makes the reporting decision.
The general S corporation rule
The IRS instructions generally exclude payments to corporations from Form 1099-MISC and Form 1099-NEC reporting. An S corporation falls within that exemption for many payment categories. The same treatment generally applies to an LLC classified as an S corporation for federal tax purposes. Source: IRS Instructions for Forms 1099-MISC and 1099-NEC.
The exemption is only one part of the review. The payment category, payment method, payment year, and any backup withholding must also be considered.
Exceptions that can still apply to S corporations
The IRS instructions identify payment categories that remain reportable when the payee is a corporation, including an S corporation.
- Attorneys' fees for legal services are generally reported on Form 1099-NEC.
- Gross proceeds paid to an attorney are generally reported on Form 1099-MISC.
- Medical and health care payments are generally reported on Form 1099-MISC.
- Cash payments for fish purchased for resale are generally reported on Form 1099-MISC.
- Substitute payments in lieu of dividends or tax-exempt interest are generally reported on Form 1099-MISC.
- Payments by a federal executive agency for services can remain reportable on Form 1099-NEC.
When an S corporation W-9 appears with one of these payment categories, route the record to the firm's qualified reviewer before applying the exemption. Source: IRS Instructions for Forms 1099-MISC and 1099-NEC.
Legal payments require separate treatment
Legal-service payments are a common exception to the corporate exemption.
For payments made in 2026, attorneys' fees of at least $2,000 paid in the course of a trade or business are generally reported on Form 1099-NEC. Gross proceeds paid to an attorney generally use Form 1099-MISC and retain a separate $600 threshold. These rules apply to incorporated law firms as well as other legal-service providers. Sources: IRS Instructions for Forms 1099-MISC and 1099-NEC and Public Law 119-21, section 70433.
For payments made in 2025, the corresponding attorneys' fee threshold in the 2025 instructions is $600. Source: IRS 2025 Instructions for Forms 1099-MISC and 1099-NEC.
Medical and health care payments can remain reportable
Medical and health care payments are listed among the corporate-payment exceptions. That means an incorporated medical provider can still require Form 1099-MISC review when the payment category, payment method, payment year, and threshold support reporting. Source: IRS Instructions for Forms 1099-MISC and 1099-NEC.
The threshold for affected medical and health care payments is $600 for 2025 and $2,000 for 2026. Sources: IRS 2025 instructions and Public Law 119-21, section 70433.
Payment method changes the review path
Payments made by credit card, payment card, or certain third-party payment networks are generally reported by the payment settlement entity on Form 1099-K. Those transactions are generally not reported by the payer on Form 1099-MISC or Form 1099-NEC. Source: IRS Instructions for Forms 1099-MISC and 1099-NEC.
Separate card and processor payments before applying an S corporation exemption or exception rule.
The S corporation evidence comes from Form W-9
Use the federal tax classification shown on Form W-9 rather than the entity suffix in the vendor name. A corporation can operate under many naming conventions, and an LLC can elect S corporation treatment.
Form W-9 supplies the payee's name, taxpayer identification number, and federal tax classification for information-return workflows. Source: IRS About Form W-9.
The requester instructions explain that an LLC that is not disregarded identifies its classification as C, S, or P. A disregarded LLC follows its owner's classification. Source: IRS Instructions for the Requester of Form W-9.
Thresholds depend on the payment year
Thresholds matter only after the payment is otherwise within a reportable category. A normal payment covered by the corporate exemption does not become reportable simply because the total is high.
- For payments made in 2025 and filed in early 2026, the 2025 IRS instructions use $600 for many common Form 1099-MISC and Form 1099-NEC categories. Source: IRS 2025 Instructions for Forms 1099-MISC and 1099-NEC.
- For payments made in 2026 and filed in early 2027, Public Law 119-21 sets $2,000 for affected categories, including attorneys' fees and medical and health care payments, while other categories retain separate thresholds. Source: Public Law 119-21, section 70433.
- Gross proceeds paid to an attorney retain a separate $600 threshold in the 2026 instructions.
- Backup withholding can require reporting regardless of the payment amount.
Match the instructions edition, payment category, and payment method to the payment year before making the final decision.
Firm review workflow
- Confirm the payee name and S corporation classification from Form W-9.
- Record the payment year and use the matching IRS instructions edition.
- Identify the payment category.
- Separate credit card and qualifying payment-network transactions.
- Check the corporate-exception list before applying the exemption.
- Check whether backup withholding occurred.
- Route legal, medical, incomplete, conflicting, or otherwise uncertain records to the firm's qualified reviewer.
Escalation and readiness checklist
| Area | Check | Why it matters |
|---|---|---|
| Entity evidence | Confirm Form W-9 identifies the payee or owner as an S corporation. | The federal classification controls the entity review. |
| Payment year | Record the payment year before applying a threshold. | Directs staff to the correct IRS instructions edition. |
| Payment category | Separate ordinary services from legal, medical, and other exception categories. | Exception categories can override the corporate exemption. |
| Payment method | Separate card and payment-network transactions. | Those transactions generally follow Form 1099-K reporting. |
| Backup withholding | Confirm whether federal income tax was withheld. | Reporting can be required regardless of the payment amount. |
| Record quality | Check legal name, address, W-9 status, and TIN last4. | Improves the firm review handoff. |
| Escalation | Send unclear entity or payment records to a qualified reviewer. | Keeps the final decision with the firm. |
Prepare the vendor record for review
W9Finder organizes missing W-9 requests, vendor readiness issues, and review handoffs so the exemption review starts from more complete records.
FAQ
Do S corporations get a 1099?
Generally no for payment categories covered by the corporate exemption. Listed exceptions can remain reportable, including attorneys' fees, attorney gross proceeds, medical and health care payments, cash fish purchases for resale, substitute payments, and certain federal executive agency service payments. Source: https://www.irs.gov/instructions/i1099mec
Does an S corporation attorney get a 1099?
Legal-service payments are an exception to the corporate exemption. Attorneys' fees are generally reported on Form 1099-NEC, while gross proceeds paid to an attorney are generally reported on Form 1099-MISC. The applicable threshold depends on the payment year and category. Source: https://www.irs.gov/instructions/i1099mec
Does an LLC taxed as an S corporation get a 1099?
An LLC classified as an S corporation generally receives the same corporate exemption for many payment categories, subject to the listed exceptions. Confirm the classification on Form W-9 and review the payment category, payment method, and payment year. Sources: https://www.irs.gov/pub/irs-pdf/iw9.pdf and https://www.irs.gov/instructions/i1099mec
Do medical payments to an S corporation require a 1099?
Medical and health care payments are a listed exception to the corporate exemption. Review the payment method, payment year, threshold, and other facts before filing. Source: https://www.irs.gov/instructions/i1099mec
Do credit card payments to an S corporation go on Form 1099-NEC?
Payments made by credit card or certain third-party payment networks are generally reported by the payment settlement entity on Form 1099-K rather than by the payer on Form 1099-NEC or Form 1099-MISC. Source: https://www.irs.gov/instructions/i1099mec
Does the payment year change the threshold?
Yes. The 2025 instructions use $600 for many common categories. Public Law 119-21 sets $2,000 for affected categories in 2026, while other categories retain separate thresholds. Sources: https://www.irs.gov/pub/irs-prior/i1099mec--2025.pdf and https://www.congress.gov/119/plaws/publ21/PLAW-119publ21.pdf
Does W9Finder provide tax or legal advice?
No. W9Finder supports W-9 collection, vendor record cleanup, and firm review handoffs. Reporting decisions stay with the firm and its qualified reviewers.