1099 NEC vs 1099 K

Sh0ws2022 · ‎January 28, 2022

I issued a check to an individual for $150.00 as a down payment and then paid the balance of $575.00 with a credit card. Since the individual meets the threshold of over $600.00 and I paid the majority with a credit card, do I issue a 1099 for the $150.00 and the credit card processor will issue a 1099K for the $575.00? Or do I not send issue a 1099 for $150.00 since it is below the threshold of $600? I just need verification on what exactly I need to do. Thanks in advance for any answers.

BigRedConsulting · ‎January 28, 2022

You don't need to send a 1099 in this case. The threshold is for reportable payments. Non-reportable payments (regardless of the reason) don't count when calculating the threshold.

MonicaM3 · ‎January 28, 2022

Hi @Sh0ws2022

Thanks for reaching out for help with your 1099 question.

Payments to 1099 vendors made via credit card, debit card, or third party system, such as PayPal, are excluded from the 1099-MISC and 1099-NEC calculations.

In your situation, since you only issued a check for $150, you would not be required to issue a 1099 to this individual. The balance of $575 that you paid via credit card will be reported by the financial institution.

For more information, check out this 1099 resource.

Let me know if I can help with any additional questions. I’ll be a quick reply away.

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