Who Needs to Fill Out a 1099?

by Shannon Sand

February 3, 2025

Closeup photo of an IRS 1099-MISC form. — Farmers and ranchers who pay independent contractors or landowners $600 or more in a year may need to file a 1099 form. This article explains key IRS requirements for reporting non-employee payments and when to use different 1099 forms in agricultural operations.
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Understanding 1099 Forms for Farmers and Ranchers

Farmers and ranchers often pay for services from individuals who are not full-time employees, such as independent contractors, self-employed workers, or landowners. According to IRS regulations, a 1099 form must be issued to non-employees who are paid over $600 in a calendar year. This ensures the recipient reports the income for tax purposes.

Key 1099 Reporting Requirements:

To determine if a 1099 is required, three criteria must be met:

Payments of $600 or more in a calendar year
Payments made to an individual, LLC, partnership, or trust
Payments made for services

These forms must be sent early in the year to allow recipients adequate time for tax preparation.

Form 1099-MISC

When to Use:
Payments of $600 or more to independent contractors, self-employed workers, or landowners must be reported on Form 1099-MISC. Payers must send this form to payees by January 31 and file a copy with the IRS. The form details taxable income for the payee and allows the payer to track deductible business expenses.

Exceptions:
Not all payments require 1099-MISC. Common exceptions include:

Payments to corporations (except medical/health care payments and attorney fees)
Land rental payments to real estate agents
Payments for hauling grain or livestock

Additionally, payments for materials and supplies generally do not require reporting unless included in a service payment to a non-dealer contractor. Farm-related expenses like feed, seed, fertilizer, and fuel are also excluded.

Form Completion:
Form 1099-MISC includes the payer and payee’s names, addresses, and tax identification numbers. Payees provide this information on Form W-9. If a payee fails to supply their tax ID, the payer must withhold federal income taxes. Payments reported on Form 1099-MISC are subject to self-employment taxes (Medicare and Social Security), though the payer does not withhold these taxes.

Other 1099 Forms Used in Agriculture

Farmers and ranchers may need to submit other types of 1099 forms:

Form 1099-INT: Used to report interest payments over $600, such as on business loans.
Form 1099-C: Used for the cancellation of debt, which must be reported as taxable income by the debtor.

Producers can order these forms from the IRS website. For specific questions about 1099 requirements, consulting a tax advisor or attorney is recommended.