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Does an LLC Taxed as an S Corp Get a 1099?

9/26/2026

The short answer: generally no. An LLC that has elected to be taxed as an S corporation is treated as a corporation for information reporting, and payments to corporations are generally exempt from Form 1099-NEC and Form 1099-MISC reporting. The IRS instructions say so directly: payments for which a Form 1099 is not required include "generally, payments to a corporation (including a limited liability company (LLC) that is treated as a C or S corporation)."

The longer answer is where accounts payable teams and bookkeepers get into trouble. The exemption has exceptions that apply no matter how the vendor is taxed, the word "LLC" on an invoice tells you nothing about the vendor's tax classification, and the reporting threshold changed for payments made in 2026. This page walks through how to decide, vendor by vendor, using the Form W-9 as the deciding document.

Why the LLC Label Does Not Answer the Question

An LLC is a state-law entity, not a federal tax classification. For federal tax purposes, an LLC is:

  • Disregarded if it has one owner and has not elected otherwise. Payments are treated as made to the owner, and if the owner is an individual, the payments are reportable like any payment to a sole proprietor.
  • A partnership if it has two or more members and has not elected otherwise. Partnerships are not exempt; reportable payments to them get a 1099.
  • A C corporation if it filed Form 8832 to be classified as an association taxable as a corporation.
  • An S corporation if it elected S status (by filing Form 2553, which also treats it as having elected corporate classification).

Only the last two fall under the corporate exemption. That is why "Do LLCs get 1099s?" has no single answer, and why the vendor's own certification on Form W-9 is the document that controls.

How the Form W-9 Drives the Decision

The current Form W-9 (Rev. March 2024) asks the vendor to check one box on line 3a for federal tax classification. For an LLC, the instructions are specific:

  • An LLC classified as a partnership, or one that has filed Form 8832 or Form 2553 to be taxed as a corporation, checks the "LLC" box and enters a code: P for partnership, C for C corporation, or S for S corporation.
  • A disregarded LLC does not check the LLC box. It checks the box for its owner's classification (for example, "Individual/sole proprietor"), puts the owner's name on line 1 and the LLC's name on line 2, and provides the owner's taxpayer identification number.

So the decision rule for a W-9 from an LLC is:

Line 3a on the W-9

Treat the vendor as

1099-NEC / MISC for ordinary services or rent?

LLC box, code S

S corporation

Generally no (corporate exemption)

LLC box, code C

C corporation

Generally no (corporate exemption)

LLC box, code P

Partnership

Yes, if reportable and over the threshold

Individual/sole proprietor box, LLC name on line 2

Disregarded entity owned by an individual

Yes, to the owner, if reportable and over the threshold

 

Line 4 is a second check. Corporations generally enter exempt payee code 5. That code signals exemption from backup withholding for the payment types the corporation is exempt for, but it does not override the exceptions below.

A practical caution about the W-9 itself. The March 2024 revision of Form W-9 still shows "$600" in its exempt payee chart, because the form predates the 2025 law change. The reporting threshold for payments made after December 31, 2025 is set by the Form 1099 instructions, not by that chart.

The Exceptions: When an S Corp LLC Still Gets a 1099

The corporate exemption does not apply to several categories of payment. Under the Instructions for Forms 1099-MISC and 1099-NEC (Rev. 12/2026), the following payments to corporations, including LLCs taxed as C or S corporations, generally must still be reported.

Attorneys' fees and gross proceeds paid to attorneys

The term "attorney" includes a law firm or other provider of legal services, and the corporate exemption does not apply to payments for legal services. A law firm organized as an LLC with an S election still gets:

  • Form 1099-NEC, box 1a for attorneys' fees of $2,000 or more paid in the course of your trade or business (Section 6041A(a)(1)).
  • Form 1099-MISC, box 10 for gross proceeds of $600 or more paid to an attorney in connection with legal services but not for the attorney's own services, such as a settlement payment made to the claimant's attorney (Section 6045(f)). Note that this threshold was not raised.

An attorney must supply its TIN whether it is a corporation or another entity, though it is not required to certify it. If the attorney does not provide a TIN, backup withholding applies to reportable payments.

Medical and health care payments

Payments of $2,000 or more to a physician or other supplier or provider of medical or health care services are reported in box 6 of Form 1099-MISC, and the exemption for corporations does not apply to payments for medical or health care services provided by corporations, including professional corporations. If the payment is made to the corporation, the corporation is listed as the recipient, not the individual who provided the services. Payments to pharmacies for prescription drugs are not reportable.

Other exceptions AP teams rarely hit

  • Payments by a federal executive agency for services, which are reported on Form 1099-NEC even when the vendor is a corporation.
  • Cash payments for fish purchased for resale (Form 1099-MISC, box 11).
  • Substitute payments in lieu of dividends or tax-exempt interest (Form 1099-MISC, box 8), which mostly concern brokers.

For most businesses, the two that matter are legal fees and medical payments. If your vendor master file flags every corporation as "no 1099," those two categories are where the errors come from.

The $2,000 Threshold for Payments After 2025

The One Big Beautiful Bill Act (P.L. 119-21) raised the general reporting threshold under Sections 6041 and 6041A from $600 to $2,000 for payments made after December 31, 2025, and the backup withholding threshold follows it. The Form 1099 instructions note that the amount may be adjusted for inflation beginning in calendar year 2027.

For the 2026 calendar year (forms filed in early 2027):

Payment type

Form and box

Threshold

Nonemployee compensation, including attorneys' fees

1099-NEC, box 1a

$2,000

Rents

1099-MISC, box 1

$2,000

Medical and health care payments

1099-MISC, box 6

$2,000

Gross proceeds paid to an attorney

1099-MISC, box 10

$600

Royalties

1099-MISC, box 2

$10

 

Payments made in 2025 and earlier were subject to the $600 threshold. If you are correcting or late-filing 2025 forms, use the rules for that year.

Thresholds are applied per payee for the year. A vendor that crosses the threshold through several smaller invoices is reportable for the total.

Payments That Do Not Need a 1099 From You at All

Two categories trip up AP teams who apply the corporate exemption backward:

  • Card and third-party network payments. Payments you make by credit card, debit card or through a payment settlement entity are reported by that entity on Form 1099-K and are not subject to reporting on Form 1099-NEC or 1099-MISC. That is true whether the vendor is an S corporation, a partnership or an individual.
  • Payments for merchandise, freight, storage and similar items, which are excluded regardless of the vendor's classification.

Wages paid to employees go on Form W-2, not a 1099, and that includes the wages an S corporation pays its own shareholder-employees.

Common Scenarios

A consultant invoices as "Smith Consulting LLC." Request a W-9 before the first payment. If line 3a shows the LLC box with code S, no 1099-NEC is required for consulting fees. If it shows the individual box with the LLC name on line 2, it is a disregarded entity: report the payments to the owner under the owner's TIN once they reach $2,000 for the year.

A law firm organized as an LLC taxed as an S corporation handles a contract dispute. Report its fees on Form 1099-NEC if they total $2,000 or more. If you pay a settlement to the other side's attorney, the gross proceeds rule applies at $600.

A physical therapy practice organized as an S corporation LLC treats injured employees under a company program. Medical and health care payments to it are reportable on Form 1099-MISC, box 6, once they reach $2,000 for the year.

A vendor's W-9 says S corporation, but the vendor's owner tells you the S election "is pending." An LLC is not an S corporation until its election is effective. The W-9 should reflect the classification that applies to the payments; if in doubt, ask for an updated W-9 once the vendor's election is accepted and keep both on file.

A landlord LLC. Rent paid to an LLC taxed as an S corporation is covered by the corporate exemption. Rent paid to a disregarded LLC owned by an individual, or to an LLC taxed as a partnership, is reportable at $2,000.

Is It Wrong to Send a 1099 to an S Corp Anyway?

Some payers issue 1099s to every vendor on the theory that over-reporting is safer. It is not a violation to file an information return that was not required, but it creates noise: the recipient may have to reconcile a form it should not have received, and your own records stop showing which vendors are genuinely reportable. The better practice is a clean vendor master file with the W-9 classification captured at onboarding and the exception categories (legal, medical) flagged separately.

What is clearly a problem is the reverse: treating a disregarded LLC or a partnership as a corporation because its name ends in "LLC" or "Inc." and its owner told you it was "an S corp." Missing a required return can bring information return penalties, and without a valid TIN you may also have had a backup withholding obligation you did not meet.

A Year-End Process for AP and Bookkeeping Staff

  1. Collect a W-9 before the first payment to every new vendor that provides services, rents property to you, or is an attorney or medical provider.
  2. Record the line 3a classification in the vendor master file, including the LLC tax code (C, S or P), not just "LLC."
  3. Flag legal and medical vendors so the corporate exemption is never applied to them automatically.
  4. Exclude card and third-party network payments from 1099 totals.
  5. Run TIN matching before year-end where available, to fix name and number mismatches before filing.
  6. Apply the right threshold for the payment year: $2,000 for 2026 payments, $600 for gross proceeds to attorneys.
  7. Calendar the deadline. Form 1099-NEC is due to recipients and the IRS by January 31. When that date falls on a weekend or legal holiday, the deadline moves to the next business day, so for 2026 payments it is Monday, February 1, 2027. Our post on 1099 and W-2 filing deadlines covers the rest of the calendar, including the electronic filing requirement.

If a worker is being paid as a contractor and you are unsure whether they should be on payroll instead, that is a separate question with larger consequences; see our guide to employee vs. independent contractor classification. Year-end reconciliation of information returns to the general ledger is covered in our year-end payroll reconciliation checklist.

Train the Team That Touches Vendor Payments

Most 1099 errors are made at vendor onboarding, by staff who were never shown how to read a W-9. Our webinar on the basics of 1099 reporting: IRS Form 1099, 1099-NEC and Form 1099-MISC is a starting point for AP and bookkeeping staff. For teams already comfortable with the basics, the IRS Form 1099, 1099-NEC and Form 1099-MISC advanced issues and updates session goes further.

Frequently Asked Questions

Does an LLC taxed as an S corp get a 1099-NEC?

Generally no. The Form 1099 instructions exempt payments to corporations, including an LLC treated as a C or S corporation, from 1099-NEC and 1099-MISC reporting. The exceptions are attorneys' fees, gross proceeds paid to attorneys, medical and health care payments, and a few specialized categories such as payments by federal executive agencies. Confirm the vendor's classification from its Form W-9: the LLC box with code S on line 3a means S corporation treatment.

How do I know whether an LLC is taxed as an S corporation?

Ask for a Form W-9 and look at line 3a. An LLC taxed as an S corporation checks the "LLC" box and enters "S" as its tax classification. A code of "C" means C corporation, and "P" means partnership. A single-member LLC that is disregarded does not check the LLC box at all; it checks its owner's classification, such as individual/sole proprietor, and gives the owner's TIN. The name on the invoice is not evidence of tax status.

Do I need to send a 1099 to an S corp law firm?

Yes. The corporate exemption does not apply to payments for legal services. Attorneys' fees of $2,000 or more paid in the course of your trade or business go on Form 1099-NEC, box 1a, even when the law firm is an S corporation. Gross proceeds of $600 or more paid to an attorney, such as a settlement payment that is not for the attorney's own services, go on Form 1099-MISC, box 10.

What is the 1099 threshold for 2026?

For payments made after December 31, 2025, the threshold for nonemployee compensation, rents, medical and health care payments and most other 1099-NEC and 1099-MISC categories is $2,000 per payee for the year, under the One Big Beautiful Bill Act. The IRS instructions say it may be adjusted for inflation beginning in 2027. Some thresholds did not change: gross proceeds paid to attorneys remain at $600, and royalties at $10.

Does a single-member LLC get a 1099?

Usually yes, unless it has elected corporate or S corporation treatment. A single-member LLC is disregarded by default, so payments are treated as made to its owner. If the owner is an individual, reportable payments of $2,000 or more for the year go on a 1099 issued in the owner's name and TIN, with the LLC's name shown as the business name. Check the vendor's W-9 to confirm.

Do I issue a 1099 if I paid an S corp by credit card?

No. Payments made by credit card, debit card or through a third-party payment network are reported by the payment settlement entity on Form 1099-K. The instructions say they are not subject to reporting on Form 1099-NEC or 1099-MISC. That rule applies whatever the vendor's classification, so exclude card and network payments from your 1099 totals.