Do LLC S Corps Get a 1099? The Rule and the Exceptions

You made the S corp election. Now January comes, and a client asks for your W-9. Then a 1099-NEC shows up in the mail. Or it does not show up, and you wonder if you missed something.

Here is the short answer. Do LLC S corps get a 1099? Most of the time, the payer is not required to send one. The IRS treats your LLC as a corporation once it is taxed as one. Payments to corporations are mostly left off Forms 1099-NEC and 1099-MISC.

But “mostly” matters. A few kinds of payments must be reported, even when the payee is a corporation. And a W-9 filled out the wrong way can send a 1099 to the IRS under your personal Social Security number. That can lead to an IRS letter saying you left income off your personal return.

#Do LLC S corps get a 1099? The corporate exemption

#Where the corporate exemption comes from

The rule sits in the Treasury regulations. Treas. Reg. 1.6041-3(p) lists payments that do not need an information return. The first item on that list is a payment made to a corporation. You can read the text on eCFR at 26 CFR 1.6041-3.

The Instructions for Forms 1099-MISC and 1099-NEC list a clear exception. It covers “payments to a corporation (including a limited liability company (LLC) that is treated as a C or S corporation).”

#Why an LLC counts as a corporation here

An LLC is a state law entity. For federal tax, it can be taxed as a sole proprietor, a partnership, a C corp, or an S corp. Once your LLC files Form 2553 and the IRS accepts the election, it is taxed as a corporation. That is the status the 1099 rules look at. The state label “LLC” does not matter here.

If you are still deciding whether to make the election, our guide to S corp election mechanics walks through it.

#Who is NOT covered by the exemption

The exemption is about tax classification, not the name on the door. These businesses still get 1099s, like anyone else:

• A single-member LLC with no election. It is a “disregarded entity.” The payer reports to the owner.
• A multi-member LLC taxed as a partnership. Partnerships are not corporations.
• A sole proprietor using a business name (a “DBA”).

#The exceptions: payments that still get a 1099

The corporate exemption has holes. The IRS 1099 instructions list payments that must be reported, even when the payee is a corporation. Here are the ones that matter most for small businesses.

#Legal fees paid to a law firm

If your business is a law practice, the exemption does not help you. The reg itself carves out “attorneys’ fees.” The IRS instructions say: “The exemption from reporting payments made to corporations does not apply to payments for legal services.”

• Attorneys’ fees of $2,000 or more go in Form 1099-NEC, box 1a.
• Gross proceeds paid to an attorney, like a settlement check, go in Form 1099-MISC, box 10 once they hit $600.

So an S corp law firm should expect 1099s from business clients.

#Medical and health care payments

The 1099 instructions carve this out directly. In their words, the corporate exemption does not apply to “payments for medical or health care services provided by corporations, including professional corporations”. Those payments go in Form 1099-MISC, box 6, at $2,000 or more.

That means a dental, therapy, or medical practice set up as an S corp will often get 1099-MISC forms, mostly from insurance companies. Payments to tax-exempt hospitals and government-run facilities stay exempt.

#The smaller exceptions

The instructions name a few more payments to corporations that must still be reported:

• Cash paid for fish bought for resale (Form 1099-MISC, box 11)
• Substitute payments in lieu of dividends or tax-exempt interest (Form 1099-MISC, box 8)
• Payments for services by a federal executive agency (Form 1099-NEC, box 1a)

If you sell services to a federal agency, expect a 1099-NEC even as an S corp.

#Form 1099-K is a different system

Card payments and payment app transactions are reported on Form 1099-K by the payment processor, not on a 1099-NEC. The corporate exemption above is about 1099-NEC and 1099-MISC only. Corporations can still get a 1099-K. Our guide to the Form 1099-K threshold and gross amount covers how to reconcile it.

#How to fill out your W-9 as an S corp

The W-9 is how a payer learns that you are a corporation. If you fill it out wrong, the payer has no way to know the exemption applies.

#Line 1 and line 2: the names

Per the Form W-9 instructions (Rev. March 2024), an LLC that is not a disregarded entity enters the entity’s name, as shown on its tax return, on line 1. A trade name or DBA goes on line 2.

#Line 3a: check “LLC” and write “S”

This is the box people get wrong. The W-9 has seven boxes on line 3a. For an LLC taxed as an S corp:

• Check the “LLC” box.
• In the space next to it, enter “S” for S corporation.

Do not check “Individual/sole proprietor.” The W-9 instructions cover this case directly. Picture an LLC that filed Form 8832 or 2553, electing to be taxed as a corporation. That LLC checks the LLC box. It enters its tax code: C, S, or P.

If your business is a state-law corporation (an Inc. or Corp.) that elected S status, check the “S corporation” box instead.

#Line 4 and Part I: exemption code and EIN

Line 4 asks for an exempt payee code. Code 5 means “a corporation.” Code 5 covers most service payments. It does not cover legal fees, medical payments, federal agency service payments, or card and payment-app payments. Say you are a law firm or medical practice. Expect the payer to treat you as subject to backup withholding, if your TIN is missing or wrong. One wrinkle: the same chart says S corps must not use an exempt payee code for broker transactions. For a normal service invoice, our reading is that code 5 is fine to enter. Leaving it blank is also fine, since line 3a already shows you are an S corp. Confirm with your tax pro before relying on this.

In Part I, enter your EIN, not your Social Security number. This one choice prevents most 1099 headaches.

#What to do when a client sends a 1099 anyway

Many payers send 1099s to every vendor. It is easier for them than sorting out who is exempt. Getting one is not a problem by itself.

#Report your income either way

A 1099 does not create income, and a missing 1099 does not remove it. Your S corp reports all of its gross receipts on Form 1120-S, whether or not anyone sent a form. A 1099 sent to a corporation is just extra paper.

#Do not count it twice

The risk is double counting. Say your books already show the $8,000 a client paid you. Do not add another $8,000 just because a 1099 arrived. Match each 1099 to deposits in your books. Keep the 1099 with your year-end records. Our Form 1120-S and K-1 walkthrough shows where gross receipts land on the return.

#Check the name and number on the form

Look at the recipient name and TIN on the 1099. You want your company name and EIN. If it shows your personal name and Social Security number, see the next section.

#The mismatch that causes IRS letters

#Why the SSN version is the real risk

The IRS matches 1099s to tax returns by taxpayer ID number. If a 1099 is filed under your Social Security number, the IRS looks for that income on your personal Form 1040. But the money went into your S corp, and it was reported on the 1120-S. Your 1040 only shows your W-2 salary and your K-1 share.

The result can be an automated notice saying your personal return is missing income. Our guide to the CP2000 notice explains how those letters work and how to answer one.

#How to fix it

• Ask the payer for a corrected 1099 showing your company name and EIN. The 1099 instructions explain how payers file corrections.
• Send a current W-9 with line 3a marked “LLC” and “S” and your EIN in Part I, so next year’s form is right.
• Keep proof that the income was reported on the 1120-S, like the deposit and the matching line in your books.

#A worked example

Say your S corp does marketing work. A client pays it $8,000 in 2026 and sends a 1099-NEC.

• 1099 under your EIN: The S corp already reports the $8,000 in gross receipts. Nothing extra to do. Total income reported: $8,000, once.
• 1099 under your SSN: The S corp still reports the $8,000. But the IRS now expects to see $8,000 on your 1040. Ask for a corrected form. If a notice comes, show that the $8,000 is already inside the S corp’s gross receipts.

#What this means for your bookkeeping

#Track income from deposits, not 1099s

Because many clients will not send you a 1099, your books are the only full record of what came in. Income is tracked from bank deposits and invoices, not from the forms you get in January. Clean monthly books make the 1099 match a five-minute job. If you want help with that, our bookkeeping service does it every month.

#Remember your own 1099 duties

Being exempt from getting 1099s does not exempt you from sending them. Say your S corp pays a non-corporate contractor $2,000 or more for services in 2026. You file a 1099-NEC. Lawyers get one even if their firm is a corporation. If you paid by credit card or a payment app, you do not send a 1099. The card company or app reports it instead. The deadline is January 31, or the next business day if it falls on a weekend. For 2026 payments, January 31, 2027 is a Sunday, so the date moves to Monday, February 1, 2027. Get a W-9 from every vendor before you pay them. Our guide on 1099 vs W-2 contractor classification covers who counts as a contractor.

#A Texas note

Texas has no state income tax, so there is no Texas state copy of a 1099 to worry about. Your federal rules above are the whole picture for most San Antonio businesses.

#Common questions

#Do LLC S corporations get a 1099?

Usually not. An LLC taxed as an S corp counts as a corporation, and payments to corporations are exempt from most 1099-NEC and 1099-MISC reporting. The main exceptions are legal fees and medical or health care payments.

#Does an LLC S corporation get a 1099-NEC for consulting work?

Generally no, if the payer has a W-9 showing your LLC is taxed as an S corp. The payer may still send one by choice. If they do, make sure it uses your company name and EIN.

#Do S corps get 1099s for rent?

Rent paid to a corporation is generally exempt from Form 1099-MISC. If you own a rental through an S corp, your tenants usually do not need to send one. A property manager collecting rent for you follows its own rules.

#Does a single-member LLC get a 1099?

Yes, if it has not elected to be taxed as a corporation. A single-member LLC with no election is a disregarded entity. So payers report to the owner, under the owner’s SSN, or the owner’s EIN, if the owner has one, per the W-9 instructions.

#What box do I check on a W-9 for an LLC taxed as an S corp?

Check the “LLC” box on line 3a and enter “S” in the space next to it. Use your EIN in Part I. A state-law corporation with an S election checks “S corporation” instead.

#A client sent my S corp a 1099. Do I have to do anything?

Match it to your books and keep it with your records. Report your income once, on Form 1120-S. If it was issued under your Social Security number, ask the client for a corrected form under your EIN.

#Do S corp law firms and medical practices get 1099s?

Yes. Legal fees and medical or health care payments are exceptions to the corporate exemption. Law firms and medical practices should expect 1099s even as S corps.

#Do I need to send 1099s from my S corp?

Yes, if your S corp pays a person or non-corporate business $2,000 or more for services in 2026. The exemption only covers receiving them. File Form 1099-NEC by January 31, or the next business day.

#Ready to talk through your situation?

If 1099s, W-9s, or your S corp setup feel messy, we can look at your books and your forms with you. Book a Tax Discovery call: free, on Google Meet, no pitch, and free advice either way.