Does an S Corp Get a 1099?
The answer for both sides of the payment: whether you send one, and whether your own S corp receives one, plus what to do when a 1099 shows up under your SSN instead of your corporation's EIN.
A guide by Taxstra Tax & Accounting — CPA-led tax strategy for business owners
Written by Bryan Martin, CPA, Managing Partner and Founder of Taxstra. Last updated July 8, 2026.
Generally, no: payments to an S corporation for ordinary services do not require a 1099-NEC. But "does an s corp get a 1099" is really two questions, and almost every answer online only handles one of them. If you are paying a vendor that is an S corp, the answer decides whether you file a form in January or risk a penalty per missed form. If you ARE the S corp, the answer decides whether the IRS computer matches your income to your corporation or to your Social Security number, and that mismatch is where surprise notices come from.
One Question, Actually Two
The 1099 question is entity plumbing, not paperwork
The 1099 question is not really a forms question. It is an entity-plumbing question. A 1099 is just the IRS's tracer dye. Whether one gets filed, and whose taxpayer ID it carries, tells you whether your money is flowing through the pipe you built (the corporation) or leaking around it (your Social Security number).
Do You Send a 1099 to an S Corp You Paid?
Side 1: you are the payer
The corporate exemption is the core rule: payments to corporations, including S corps, are generally exempt from 1099-NEC reporting for services.
The reporting threshold itself changed for 2026. Under the One Big Beautiful Bill Act (OBBBA), the 1099-NEC and 1099-MISC reporting threshold jumped from $600 to $2,000, effective for payments made on or after January 1, 2026. It will be inflation-adjusted starting in 2027. That change raises the dollar floor for non-exempt vendors; it does not touch the corporate exemption itself, which is a separate rule.
How do you actually know the vendor is an S corp? You do not guess from the name. "LLC" in a vendor name proves nothing; an LLC can be taxed as an S corp, a partnership, or a sole proprietor. You know from the federal tax classification box on their Form W-9. If the box says C or S corporation, no 1099-NEC for ordinary services. If it says individual/sole proprietor or partnership, you file.
If you are a 1099 contractor yourself and want the other side of this picture, see our guide to 1099 tax deductions.
The Exceptions: When an S Corp DOES Get a 1099 From You
Named carve-outs where corporate status does not exempt the payee
A short list of payment types still require a 1099 to a corporation, S corp included.
- Attorney fees for legal services: 1099-NEC, box 1a, even if the law firm is a corporation.
- Gross proceeds paid to attorneys (for example, settlements): 1099-MISC, box 10, even to corporations.
- Medical and health care payments: 1099-MISC, box 6, even to corporations. This is directly relevant if you are a practice paying an incorporated physician group.
- A few narrower carve-outs: substitute payments in lieu of dividends or tax-exempt interest, and cash payments for fish purchased for resale. Uncommon for most businesses, but part of the full exception list.
Card and platform payments are not your problem. Payments made by credit card or through third-party settlement platforms are reported by the processor on Form 1099-K, so you do not also issue a 1099-NEC for those amounts.
The medical-payments exception is why locum agencies and practices sometimes send 1099s to incorporated physician entities. If that is your situation, this is the rule behind the form you received.
| Vendor situation | 1099 required? | Which form |
|---|---|---|
| Sole proprietor or single-member LLC, services $2,000+ | Yes | 1099-NEC |
| Partnership or multi-member LLC taxed as partnership | Yes | 1099-NEC |
| S corporation or C corporation, ordinary services | Generally no | None |
| LLC taxed as S corp (W-9 box checked) | Generally no | None |
| Attorney or law firm, legal fees (any entity type) | Yes | 1099-NEC |
| Medical/health care payments (any entity type) | Yes | 1099-MISC |
| Any vendor paid by credit card or payment platform | No (processor files 1099-K) | None from you |
Paying a Vendor? Start Here.
Paying a vendor for services?
Start here before you cut the first check.
Do you have a W-9 on file?
No W-9, no proof of classification. Get one before payment, not in January.
What box is checked: individual, partnership, or corporation?
The vendor name means nothing. "LLC" can be any of the three.
Individual or partnership?
File Form 1099-NEC if payments cross the threshold.
S corp or C corp?
Generally exempt, unless an exception applies.
Legal fees or medical/health care payment?
These exceptions apply even to a corporation.
File the form / no form needed
Attorney fees and medical payments: file. Ordinary corporate services: no form.
Simplified for illustration. See the exceptions table above for the full corporate-exemption list.
Does YOUR S Corp Receive 1099s?
Side 2: you are the payee
Sometimes yes, because of the medical or legal exceptions above, or because a payer files for every vendor out of caution. Often no. Either way, it does not change what you owe. The S corp reports all income on Form 1120-S whether or not a 1099 ever arrives. A missing 1099 is not missing income.
Waiting for 1099s to tell you what your business earned is bookkeeping backwards. Your books tell the IRS what you earned. The 1099s just need to not contradict them.
W-9 hygiene checklist
The day your S corp election is effective, give every client a new W-9 with the corporation's legal name on line 1, the S corporation box checked, and the corporation's EIN, never your SSN. Re-issue it to every existing client. They will not ask. See our full breakdown of reasonable salary rules for S corp owners for how the payroll side of this fits together.
What If the 1099 Came in YOUR Name and SSN Instead of the S Corp?
The payer-matching problem, and the page's worked example
This happens because the client kept your old sole-proprietor W-9 on file and never got the updated one. It matters because IRS document matching compares 1099-NEC totals against the return filed under that SSN. Income reported only on the 1120-S leaves the SSN side looking underreported, which is how automated underreporter notices get generated.
The first fix path: ask the payer to correct the 1099 to the corporation's EIN. If they will not, the usual fix is nominee reporting: you show the income on your return and back it out to the corporation, and your CPA papers the trail so the SSN-side matching ties out.
Worked example (hypothetical, illustrative round numbers)
Take a hypothetical consultant, Maya, who earned $180,000 this year and elected S corp status effective July 1. She invoiced $90,000 before the election as a sole proprietor and $90,000 after it through the corporation. Her biggest client never got a new W-9, so in January a single 1099-NEC for $120,000 arrives under Maya's SSN, including $60,000 that the corporation actually earned and already runs through payroll and the 1120-S.
Walking the arithmetic: $60,000 of that 1099 belongs on Schedule C, for the pre-election period. $60,000 belongs to the corporation, for the post-election period. If Maya files naively, the IRS computer sees a $120,000 1099 against only $60,000 reported on her Schedule C, a $60,000 mismatch that reads as underreported income.
The two clean resolutions: get the payer to issue a corrected 1099 (a $60,000/$60,000 split by entity), or use nominee-style reporting so the SSN-side return ties to the full $120,000 while the corporation's $60,000 share is backed out and picked up on the 1120-S. This example is illustrative and hypothetical. Results vary with your facts.
The Wrong-SSN Timeline
Election effective
Maya's S corp election takes effect mid-year.
Old W-9 still on file
Her biggest client never gets a new W-9 with the corporation's EIN.
January 1099 arrives under her SSN
One form, full-year total, filed against the wrong taxpayer ID.
Matching risk vs. the clean fix
Ignore it and risk a notice, or resolve it with a correction or nominee-style reporting.
Here is the honest part. A wrong-SSN 1099 does not usually change the total tax owed when handled correctly. The S corp savings come from the reasonable-salary and distribution split, not from where the 1099 happens to point. The 1099 cleanup is about avoiding notices and protecting the election's paper trail, not about squeezing out extra savings. If you have not compared the sole-proprietor and S corp pictures side by side, our sole proprietorship vs S corp guide walks through Maya's kind of before/after transition in more depth.
Mid-transition to an S corp and the paperwork is already messy?
A free initial consultation gets the plumbing fixed before the IRS computer notices.
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What to Expect on the Call
The Entity-Plumbing Checklist for New S Corp Owners
Transition hygiene, in order
The month your S corp election goes into effect, these five things need to happen. Skipping any of them is how a clean election turns into a messy first year.
- Use the new EIN everywhere: bank accounts, contracts, invoices, and payroll filings.
- Send an updated W-9 to every client, with the S corporation box checked and the corporate EIN.
- Route all revenue through a dedicated business bank account, not your personal one.
- Run payroll before year-end and pay yourself a reasonable salary.
- Rename existing contracts and agreements to the corporation where you can.
Setting up the S corp correctly in the first place is the subject of our full guide to how to set up an S corp the right way. And whether the election is worth it at all for your income level is a math question, not a feelings question. Run it in our S corp savings calculator before you commit to any of this. Results from the calculator are illustrative; your actual savings depend on your specific numbers.
Who This Is For
And who should skip it
This page is for business owners doing January 1099 filings, new S corp owners (especially consultants, locum physicians, and freelancers who elected mid-year), and anyone who received a 1099 under the wrong taxpayer ID. It is also for bookkeepers and office managers who own vendor onboarding.
You do NOT need this page if you are a W-2 employee with no side business; nobody should be sending you a 1099-NEC at all. You can also skip it if every contractor you pay goes through a payroll or contractor platform that files 1099s on your behalf. Spot-check the platform's filings instead of redoing the work by hand.
If your only question is whether the S corp election itself makes sense for your income, skip straight to the S corp savings calculator. This page assumes the election already exists or is imminent.
Frequently Asked Questions
1099 rules for S corporations, sending and receiving
Curious what you would owe without the S corp structure at all? Compare against our self-employment tax calculator before you decide the entity question is settled.
Get Your 1099 and Entity Plumbing Checked
A free initial consultation covers your specific situation: whether the S corp election makes sense, and whether your paperwork is actually pointing where your money is.
Find Out What You're Overpaying in Taxes
Book a free 30-minute call to walk through your situation. We'll tell you exactly how our CPA-led team can help — and whether we're the right fit.