Confusion about the question: Did you pay anyone $600 or more for work related to this property?

[tommyzhao]

I am the homeowner. I did pay way more than 600 for carpet replacement, painting, and others before renting out the house. I did pay them for the work for the rental repair. But they did not require a 1099-NEC form and I did not issue any form 1099.

Which one I should choose for the following answers? Yes or no?

Thank you for the assistant!

[Bsch4477]

You issue a 1099 for the work on your rental described on the form you included in your post, like repairs and maintenance. If those categories don’t apply answer no. 

[tommyzhao]

Thank you for your reply.

I did not issue a 1099-NEC form when I paid them for repair and maintenance.

Can I issue a 1099 form now? I need to request their SSN or TIN, who did the work for me, right?

Thanks!

[Kat]

If you paid businesses to do repairs, carpet replacement, etc., you were not required to issue a 1099-NEC.  These businesses are responsible for reporting their business income.

If you paid an individual (who doesn't do this kind of thing for a living, or have a proper business) to do the work, you would have needed to issue a 1099-NEC (if you paid this individual more than $600).  This is not typical.

Unless this is the case in your situation, answer NO to the question you have highlighted.

[Kat · Accepted solution]

@tommyzhao Let's clear up something.  Did you hire a friend (let's call him Joe) to purchase and install carpet in your rental house?  Or did you hire Carpet One (a business that installs new carpet)?  Carpet One will issue you an invoice and will report the income in their business system.  If you hired Carpet One, you are not required to issue them a 1099-NEC.  This is their business.  But just hiring a friend would require a 1099-NEC, which notifies the IRS that you paid your friend $600 or more to do the work.  This is just a way of notifying the IRS that Joe earned the money and the IRS will be expecting Joe to report the income.

SO....if you didn't hire a non-business, you're not required to issue a 1099-NEC.  You do need to keep any invoices as proof that you spent the money on repairs, etc.

As for issuing a 1099-NEC:  If you should've issued the document(s), the deadline was January 31.  I'd think you'd still want to issue the document as required by the IRS, even if late.  There are also requirements to file copies of this information to the IRS.  Yes, you'll need a SSN or ITIN for any individuals to whom you issue a 1099.

This page on the IRS website explains more about 1099-NEC:

Instructions for Forms 1099-MISC and 1099-NEC (01/2024) | Internal Revenue Service (irs.gov)