K M W
Employee Tax Expert

Business & farm

Generally speaking you would report amounts paid to contractors on a form 1099NEC; however, there is an exception to this requirement. If the contractors is not a U.S. citizen AND the services are provided outside the U.S., then you do not have to file the 1099NEC for that contractor.

 

Even if you don't have to file a 1099NEC for the foreign contractor, you can still deduct the expense on your business tax return. Just make sure to keep adequate documentation of the expense, similar to any other deductions you take.  In your situation, I would recommend keeping a copy of the original signed contract as well as keeping documentation of the invoices you receive and proof of payment to the contractors.

 

 

 

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