1099-NEC for rental property repairs

[Vic14]

I need to replace the water heater in my rental property which will cost more than $600. I am not sure how I am going to issue the 1099-NEC form. If it is a local plumber, I don't feel comfortable asking for their social sec number. If it is a corporate, do I need to check their tax status? Also, does it make a difference paying with cash vs check/credit card. Basically, trying to find out how to do this repair without having to file 1099-NEC. Thanks.

[DoninGA · Accepted solution]

If you are the landlord and are not in the business of property rentals you are not required to issue a Form 1099-NEC to any independent contractor or a service company employee who performs a service on the rental property.

[Carl]

What @DoninGA said is correct. However, you can issue one if you desire. Sometimes folks elect to issue the 1099-NEC to unincorporated contractors as a way of supporting their claim to the QBI deduction. It's really not necessary though.

[AmeliesUncle]

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@Vic14 wrote:

If it is a local plumber, I don't feel comfortable asking for their social sec number. If it is a corporate, do I need to check their tax status?

Also, does it make a difference paying with cash vs check/credit card.

If your rental DOES rise to the level of a trade or business, then ...

You give the plumber a W-9 to fill out.  They could use their EIN instead of their Social Security Number.  Or they may check the box that they are a corporation, so no 1099-NEC would be required.

https://www.irs.gov/pub/irs-pdf/fw9.pdf

Yes, if you pay by credit card, you would not need to issue a 1099-NEC because the credit card payments fall under different rules (the credit card merchant may issue the plumber a 1099-K).

[Critter-3]

Pay by credit card and avoid the need for a 1099 completely.