How do I file a 1099 to a foreign contractor?

As long as the foreign contractor is not a U.S. person and the services are wholly performed outside the U.S., then no Form 1099 is required and no withholding is required.

You should get a form W-8BEN signed by the foreign contractor.  By signing Form W-8BEN, the foreign contractor is certifying that he or she is not a U.S. person. The Form W-8BEN is not filed with the I.R.S. It is kept on file with the U.S. payor in case the U.S. payor is audited. If audited, the Form W-8BEN supports why no Form 1099 was issued and why no tax was withheld.

What are the right steps if the foreign contractor is not a U.S. person and the services were performed in the U.S.?

Thanks for joining in this thread, @tsc14.

Yes, Rustler is correct. The contractor has to sign the form so you will have a justification that the contractor is a non-US citizen.

In the meantime, the best way is to get in touch with the IRS to make sure that you will be filing the correct form at year-end. 

You may refer to this article about 1099 form and things to know when preparing your form 1099: 

• Set up and File 1099 Forms.
• Prepare and file 1099s using QuickBooks Online.

Feel free to get back in touch with me if you have other matching concerns in QuickBooks. I'd love to help.

Does a form need to be completed if it is a foreign company, rather than an individual? I looked at the W-8BEN, and it is only for individuals. We are in the USA, and the contractor is located in Canada. All work was performed remotely.

Hi,

Questions regarding foreign contractors, what do I need to file if I am a US based company and... :

- Work took place outside of US, and they are NOT a US citizen, but DO have a US work permit/green card/SS# ?

- Work took place outside of the US, and they are US citizen, but living outside US

- Work took place outside of the US, and they are US citizen, living in the US

- Work took place inside of the US, and they are NOT US citizen, but no withholding due to tax treaty

- Work took place inside of the US, and they are NOT US citizen, and had some tax withholding

Thanks so much for your help!!!

I'm happy to see you here in the Community, @TaikoArts.

To help verify the best course of action for your business and to check what form you need to file for the situation that you're in, I suggest getting in touch with the IRS. They'll be able to provide you the guidelines when filing your recommended forms.

To add up, here are some resources about the tax set up for foreign employee in QuickBooks Online for reference:

• Exemption status of foreign employees with particular visa types
• Set up Nonresident Alien (NRA) tax withholding for foreign employee

As always, you can visit me here if you have any other questions. I'll be around to get you taken care of. Wishing you a fantastic week ahead!

How would I correct a 2017 1099-MISC for a foreign worker who performed services in a foreign country? I believe the 1099-MISC was issued in error.  The company's US address was used as the contractor's home address.  IRS now believes the worker lived in US and did not pay taxes.  No W-8 BEN was filed, either.   I have contacted my CPA.  I am curious about what would be the next steps to correct this error.

Thanks for joining the thread, @Ventidue90.

I’m here to help you correct a 1099-MISC for a foreign worker.

Here’s how:

1. After preparing your 1099s, select the E-File for me option.
2. Verify your 1099 Forms, then choose Continue.
3. Review your 1099 Forms and make sure that the information brought over from QuickBooks Online is correct. Pick all or select only the 1099 forms you want to submit. Then select Continue.
4. If you want to review company and vendor information before proceeding, go to Back to Home.
5. Enter your billing info, then click Approve.
6. Review the number of forms and the total amount, then Approve.
7. Choose the delivery option for contractor copies.
8. Verify or enter missing email addresses for your contractors so that we can send access to view their 1099 forms online.
9. Push Continue.
10. Download and Submit 1099 Forms “Employer: Copy 1 & Copy C” and “Contractor: Copy B & Copy.”
11. If you locate the View forms button, you'll only get Copy A that we sent to the IRS. Other 1099 copies are available from the Home page.
12. Submit final forms to submit. Make sure that you have reviewed the 1099 forms before submitting as we do not handle corrected forms.

If the 1099 E-File doesn’t let you make corrections after it’s been e-filed. You can, make corrections in a printed copy and send it by mail to the IRS.

Don’t hesitate to get a hold of me, if you have other questions. I hope you have a great rest of your week.

Contractor lives in Puerto Rico and as we know they are US citizens.  She performs consulting work and my client needs to issue her a 1099.  QBO does not let you enter the personal info without inputting a state. Obviously Puerto Rico is not a state.  As I understand it a Puerto Rican who receives income from  US sources is required to file a US tax return. By that token I would think that my client who is a US company would be required to issue them a 1099.  How do I get around this in QBO?

Hi, mcrosa.

At this time, QuickBooks doesn't have the option to e-file 1099s with non-US addresses so it has to be done manually. Also, I'd suggest getting in touch with the IRS. They'll be able to provide you more ways and guidelines when filing your recommended forms.

You can always visit our blog site so you'll be able to get the latest news about QuickBooks and what our Product Care Team is working on.

Additionally, you can read these articles to learn more about how to prepare and file 1099 in QBO:

• 1099 E-File Service FAQs.
• Prepare and file Federal 1099s using QuickBooks Online.

If you have other concerns, just comment below or post again. I'll be sure to get back to you. Have a good one.

Thank you. 

This is very helpful, thank you. I do have a follow up question. A lot of what I'm reading on IRS sites state that a US payer is required to withhold 30% of what is paid to a foreign contractor unless they are from a country that has a treaty with the US. From what I am reading, each country has a different treaty that reduces or eliminates that 30% withholding. Does this seem right to you? If so, how do you determine the treaty (and therefore the appropriate withholding amount) for each country?

Thanks!

Thanks for posting to the Community, @julianne1030.

I suggest contacting the IRS to know more about where the US payer has come to determine the treaty for each country.

Here are the phone numbers:

• 800-829-1040 for individuals.
• 800-829-4933 for business tax questions.

Or check this article to find details on tax forms, withholdings, unemployment, and other tax, e-file and pay information, general state, and agency information, and employer registration: Internal Revenue Service Payroll Tax Compliance.

You can also refer to this article to find out more about payroll tax regulations for each state: Payroll Tax Compliance Links.
 

Please feel free to leave a message if you have follow-up questions. I'll be around to help. Enjoy your day!

I’m trying to set up my contractors on Quickbooks pro. A number of them are non us citizens and don’t have social security numbers. I get w8s from them every year so that’s not my issue but I’m unable to enter them without SS# and I want to pay them through Quickbooks. Is there a way to do this?

Thank you for posting here in the Community, @LisaTopp.

I appreciate you providing details about your concern. Allow me to share more details about your contractor who doesn't have a Social Security Number (SSN). 

If your contractor is a non-U.S. person, there's no need to send 1099 forms at all. You can input zeros as a temporary SSN. However, they need to accomplished the W-8BEN form. By this, the foreign contractor is confirming that he or she is not a U.S. person. Nevertheless, if your contractor has a Tax Identification Number or TIN, you can use this in creating and sending the 1099 form. 

Also, you can leave the identification number box empty if your contractor cannot provide his or her SSN nor TIN when the time of filling Forms 1099-MISC comes. But still submit the report to the IRS. They will send a notice stating that the number is missing. This notice must be sent along with a backup withholding notice and W-9 form to the subcontractor.

For more information about how to add contractors and track payments you make to them, please refer to this article link: Set up contractors and track them for 1099s in QuickBooks.  

Also, if you want to edit your contractor information, please visit this article link: Edit Contractor Information. This article provides you detailed steps in changing the profile of your Contractors. 

If there's anything else I can further assist, please drop me a reply below and I'll get back to you.

If you have w-8ben forms filled out and your foreign contractors are not subject to any withholding due to the countries treaty, do you still have to file form 1042-S ? 

If you have forms w-8ben filled out and your foreign contractors are not subjects to US tax withholding due to the countries treaty, do you still have to file 1042-S ? 

Hi,

I have a Question regarding foreign contractors...

what do I do if I am a US based company and Work took place inside of the US, and they are a NOT US citizen. 

All work is done via the internet. The foreign contractor is in the US legally. 

Thank you so much! 

Thanks for joining in this thread, @Poppyjb.

I suggest getting in touch with the IRS to help ensure the correct form you'll be filing for the non-U.S person where the services are performed in the US.

You can also browse our QuickBooks help articles. It contains resources to help easily perform your tasks in QuickBooks.

Feel free to comment down below if you have other concerns. I'll be around to help.

What if they are a foreign contractor and do perform remote services in the US?

Thanks for sharing the information with us, @MJBsBooks.

Since your foreign contractor is working remotely outside the US, it would be best to contact the IRS for the best action to take. There, they’ll be able to guide you in filing the right forms.

Also, here are some articles that you can check for reference. These links provide complete information on about 1099 and how to prepare and file it in your QuickBooks Online (QBO) account:

• Prepare and file 1099s using QuickBooks Online
• What is a 1099 and do I need to file one?
• How to set up contractors and track them for 1099s in QuickBooks

In case you have other questions about 1099 in your QBO account, you can always tag me in. I’m only a post away from you.

We also have contractors who are not U.S. residents but are U.S. citizens.  So they need 1099s.  It's very annoying that QB does not allow entry of foreign addresses when that is the address we use to mail them documents including 1099s.  I understand you do not have electronic filing of these 1099s, but you should still allow your customers to enter the information and prepare the 1099s as part of your services; then just flag the 1099 as one that must be mailed to IRS.  The workarounds that we use are either to ask the contractor for a second address in the U.S. that may be used, usually a relative.  The other is our own office address.  In both cases we enter "℅"  (in care of) to keep things clear.  It's still extra work, but less extra work than the suggestion above.   

Hi! 

Thank you for the information 

Very helpfull

I'm a foreign company outside the us

I have a US contractor and he is asking. E for 1099 nec

Do I have to supply it? 

I don't have any relation to us irs

Welcome to the thread, @Gabi2.

Since you're a foreign company with a US contractor, I recommend contacting Tax Agency (IRS) to help identify if you need to supply 1099 NEC and for them to guide which option best fits your business. 

To contact the IRS, you can use this link: https://www.irs.gov/help/telephone-assistance.

In the meantime, to learn more about how 1099 works in QuickBooks, see these articles:

• What is a 1099 and do I need to file one?
• How to set up contractors and track them for 1099s in QuickBooks

Feel free to leave a comment below if you have more questions. I'll be here to take care of them for you. Have a great day.