Set up contractors for 1099s

Any nonemployee who might earn $600 or more in a given year needs a 1099. Electronic QuickBooks Payments, such as credit card payments, don’t count.  Check the IRS guidelines to find out which contractors you need to file 1099s for.

For more information about contractor payment exclusions,, check out Understand which payments are excluded from a 1099-NEC and 1099-MISC.

1. Follow this link to complete the steps in product
2. Select Add a contractor.
3. Enter your contractor’s name and email address. Then, check the Email this contractor box if you want the contractor to enter their own information. Leave it unchecked if you plan to enter their information yourself.
   Note: You can click waiting for info, then fill in a contractor’s information later.  This lets you move through the process without delay.
4. Select Add contractor.

Note: All contractors added through payroll are automatically eligible for 1099s.

After you start tracking contractors for 1099 payments, QuickBooks will start tracking their payments behind the scenes. When you're ready to file your 1099s, just add the tracked payments to the form.

1. Go to Contractors, then select Contractors (Take me there)
2. Select Add a contractor.
3. Enter your contractor’s name and email address. Then, check the Email this contractor box if you want the contractor to enter their own information. Leave it unchecked if you plan to enter their information yourself.
   Note: You can click waiting for info, then fill in a contractor’s information later.  This lets you move through the process without delay.
4. Select Add contractor. 

Step 1: Turn on 1099-MISC

1. Select the Edit menu and then Preferences.
2. Select the Tax: 1099 menu. Then select the Company Preferences tab.
3. Select Yes in the Do you file 1099-MISC forms? section.
4. When you're done, select OK to save your settings.

Step 2: Add a contractor as a vendor

1. Select the Vendors menu and then Vendor Center.
2. Select the New Vendor dropdown and then New Vendor.
3. Fill out the fields on each tab. You can get this information from a W-9. You can also edit and change this information later.
4. When you're done, select OK.

Step 3: Track contractor payments for 1099s

1. Select the Vendors menu and then Vendor Center.
2. Select a vendor's name and then select Edit✎.
3. Select the Address Info tab and review the information:
   1. Make sure you have the correct two-letter state abbreviation and ZIP code.
   2. If the vendor is a person, the vendor's legal name should appear in the First Name, M.I., and Last Name fields.
   3. If you have the company name but not the person's name, leave the Company Name field blank. This prevents them from showing up twice when you prepare your 1099-MISCs.
4. Select the Tax Settings tab.
5. Select and check the Vendor eligible for 1099.
6. Enter the vendor's tax identification number in the Vendor Tax ID field.
7. When you're done, select OK.

Repeat step 3 for each contractor you want to set up for 1099 payments.

After you start tracking contractors for 1099 payments, QuickBooks will start tracking their payments behind the scenes. When you're ready to file your 1099s, just add the tracked payments to the form.

Step 1: Turn on 1099-MISC

1. From the QuickBooks menu, select Settings.
2. Select the 1099s section.
3. Select and check the 1099-MISC forms are filed box.
4. Select the accounts for each 1099 category that applies to your business for reporting and taxation purposes:
   1. From the Account column, and select an account from the dropdown list.
   2. To associate more than one account: From the dropdown list, choose Selected Accounts then select the desired accounts in the Select Accounts window. Select OK when all appropriate accounts have been selected.
      Note: Your business may not need to report on all 1099 categories. Many businesses report amounts only for Box 7: Nonemployee Compensation. For more information on reporting requirements, consult an accounting professional or the IRS.
   3. To change a threshold amount, enter the new amount in the Threshold column. This is optional.

Step 2: Track contractor payments for 1099s

1. From the Lists menu, choose Vendors.
2. In the Vendor List window, select a vendor then select Edit Vendor ✎.
3. Select the Address Info tab.
4. Make sure the Address field contains the correct two-letter state abbreviation and ZIP code.
   1. If the vendor is a person, the vendor's legal name should appear in the First Name, M.I., and Last Name fields.
   2. If you know the company name but not the person's name, leave the Company Name field blank to avoid double names on the 1099-MISC form.
5. Select the Additional Info tab.
6. Select the Vendor eligible for 1099 checkbox and in the Tax ID field, enter the vendor's tax identification number.
7. Select OK.

Repeat step 2 for each contractor you want to set up for 1099 payments.