It sounds like you're in a bit of a frustrating & tricky situation! Yes, generally, you are required to issue a Form 1099-NEC for payments of $600 or more to a non-employee, like your contractor, for services performed in your trade or business. Since you paid him $800, this requirement typically applies. TurboTax's question about issuing a 1099-NEC for paid work above $600 is standard, as the IRS requires reporting payments of $600 or more to non-employees.
To accurately complete Form 1099-NEC, you need the contractor's Taxpayer Identification Number (TIN), which is usually their Social Security Number (SSN) for individuals or their Employer Identification Number (EIN) for businesses. The Form W-9 is the standard way to request this information.
Steps you can take:
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Document Your Requests: Keep a record of all your attempts to contact the contractor, including dates, methods of communication (calls, texts, emails), and the content of your messages. This documentation is important if the IRS questions why you didn't file a complete Form 1099-NEC.
- Send a Formal Request (Certified Mail with Return Receipt Requested): If your previous attempts have been ignored, send a formal letter via certified mail with a return receipt requested. This provides proof that the contractor received your request for their tax information. Include a blank Form W-9 and clearly state that you need this information to comply with IRS regulations for issuing Form 1099-NEC.
- Backup Withholding: If the contractor refuses to provide a W-9, you are required to begin backup withholding at a rate of 24% on any future payments.
- Filing the 1099-NEC: You still need to file a Form 1099-NEC for the contractor since you paid them more than $600. File Form 1099-NEC to the Best of Your Ability: Even if you don't have the contractor's TIN, you still need to file Form 1099-NEC with the information you do have (your information, the contractor's name and address if you know it, and the payment amount). You should indicate that the TIN is missing/refused.
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Include an Explanation: When you file your tax return, you might want to include a brief explanation of your efforts to obtain the contractor's information and why the TIN is missing on the Form 1099-NEC. Keep copies of your communication attempts and the certified mail receipt as supporting documentation.
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