1099 for INACTIVE Vendors

Thanks for joining us here in the Community, gr3ggr1ff1n.

You've come to the right place for assistance. I'm happy to provide some info about 1099s for inactive vendors in QuickBooks Online.

Your vendor(s) in question will need to be active in order to track for 1099 filing purposes. There are a few steps that can help you locate and change the status of those inactive vendors. This can be done with a 1099 report:

1. Search for Vendor Contact List and open the report.
2. Select Customize.
3. In the Rows/Columns section, select Change columns.
4. Select the Track 1099 checkbox.
5. In the Filters section, select Deleted and change the ▼ dropdown to All.
6. Select Run Report.
7. Select Sort and under Sort by choose Track 1099, to sort your contractors.
8. If you see a missing Vendor, you can change their status, or continue to the next step.
   1. Select their name.
   2. Select Make Active.
9. If they have No under Track 1099.
   1. Select their name.
   2. Select Vendor Details.
   3. Select Edit ✎.
   4. Mark the Track payments for 1099 checkbox then select Save.

I'm linking an article below that contains additional details about the steps mentioned above, as well as one with more info about creating and filing 1099s:

• Troubleshoot missing contractors or wrong amounts on 1099s
• Create and file 1099s

Please don't hesitate to drop a comment below if you have any other questions. The Community always has your back.

I'm not sure you understand or I understand.

Let's say that in 2025 I have 50 Vendors that receive payments and will need a 1099 in 2026, but during the year of 2025 they become INACTIVE.  Still in 2025, I want to make them Inactive so I don't see them in dropdowns and to make sure no other payments go to them.  They have transactions in 2025 and therefore must get a 1099 in 2026.

Are you telling me that in 2026 I will have to go and make all them active once again, run the 1099 to include all of them and make sure they each get a 1099, and then make all of them inactive again?

I appreciate the additional details, gr3ggr1ff1n.

Yes, you're correct. According to the "Missing contractors or wrong amounts" article, inactive vendors will need to have their status changed to active for 1099s. 

I'm only a comment or post away if you have any other questions. Take care!

So, for others who are trying to determine this usage, Quickbooks does not make it easy to make a Vendor Inactive when you want to no longer use them but still need a 1099 next year (which could be most all Vendors you make inactive in a year).

-You must wait or record or list outside of Quickbooks all of the Vendors you want to make Inactive.

-Must wait until after 1099 are produced or else you reports will be wrong and you will have to make all of them active again, run the 1099, then make all of them inactive again. 

-If you have a lot each year, this will create a large list of Vendors who should be inactive actually stay in your active list

-You can't specify in QB that want them to be inactive.

Bottom line: Keep a list somewhere, wait until 1099 are created next year, then make all inactive from the previous year.

Seems like this could be done better.

This is the answer Grok gave:

In QuickBooks, making a vendor inactive does not prevent you from printing their 1099 forms for the following tax year, as long as the vendor is properly set up for 1099 tracking and meets the IRS requirements (e.g., payments of $600 or more during the tax year). QuickBooks will still include inactive vendors in the 1099 reporting process, so you do not need to make them active again to generate their 1099 forms.

Here’s a quick breakdown based on information from QuickBooks-related sources:

QuickBooks Online: When you prepare 1099s, QuickBooks pulls data for all vendors marked for 1099 tracking, regardless of their active or inactive status. You can access the "Prepare 1099s" option under the Expenses > Vendors menu, and the system will include eligible inactive vendors in the 1099 wizard as long as their payments meet the threshold and their tax information (e.g., TIN, address) is correctly entered.
QuickBooks Desktop: Similarly, in QuickBooks Desktop, the 1099 Wizard (accessed via Vendors > Print/E-file 1099s) includes all vendors marked as "Eligible for 1099" in the Vendor Center, whether active or inactive. You’ll need to ensure the vendor’s tax ID and payment details are correct, and the system will generate the 1099 forms for eligible vendors.
Key Steps to Ensure 1099s Print Correctly for Inactive Vendors:
Verify 1099 Setup: Confirm that the vendor is marked for 1099 tracking. In QuickBooks Online, go to Expenses > Vendors, select the vendor, click "Edit," and ensure the "Track payments for 1099" box is checked. In QuickBooks Desktop, go to Vendor Center, edit the vendor, and check "Eligible for 1099" under the Tax Settings tab.
Check Payment Details: Ensure all payments to the vendor are correctly categorized to accounts mapped for 1099 reporting (e.g., non-employee compensation or rent). This can be verified in the 1099 Wizard or by running a Vendor Contact List report with the "Track 1099" filter.
Confirm Tax Information: Ensure the vendor’s Tax ID (SSN or EIN) and address are accurate, as these are required for 1099 forms.
Run the 1099 Report: When preparing 1099s, use the 1099 Wizard to review eligible vendors. Inactive vendors should appear if they meet the payment threshold ($600 or more in cash/check payments). If they don’t show up, double-check the date range, account mapping, and 1099 eligibility settings.
Notes:
Why Inactive Vendors Are Included: QuickBooks bases 1099 eligibility on payment data and 1099 settings, not the vendor’s active/inactive status. The inactive status primarily hides vendors from regular transaction lists to streamline day-to-day operations.
Potential Issues: If an inactive vendor doesn’t appear in the 1099 list, it’s likely due to missing tax information, payments not meeting the $600 threshold, or incorrect account mapping, rather than their inactive status.
Best Practice: Before printing 1099s, run a 1099 Summary or Detail report to confirm all eligible vendors (active and inactive) are included. In QuickBooks Online, go to Reports and search for "1099 Summary." In QuickBooks Desktop, use the 1099 Wizard to view the Detail or Summary Report.
You can keep the vendors inactive and still print their 1099s when the time comes, provided their setup and payment data are correct. If you run into issues, ensure your QuickBooks software is updated to the latest release, as this can resolve form-related problems.