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Level 1

I paid a contractor (more than $600) through Paypal. Do I need to send them a 1099-MISC?

I've heard that I do not need to send a 1099-MISC to a contractor if I paid them through PayPal, even if they made more than $600. Is this correct?

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Level 12

I paid a contractor (more than $600) through Paypal. Do I need to send them a 1099-MISC?

Yes, you are correct that you do not need to send Form 1099-MISC. 

According to the IRS Instructions for Form 1099-MISC, "Payments made with a credit card or payment card and certain other types of payments, including third-party network transactions, must be reported on Form 1099-K by the payment settlement entity under section 6050W and are not subject to reporting on Form 1099-MISC. See the separate Instructions for Form 1099-K."

In short, PayPal will issue Form 1099-K to your contractor. So you do not need to send Form 1099-MISC.

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Level 12

I paid a contractor (more than $600) through Paypal. Do I need to send them a 1099-MISC?

Yes, you are correct that you do not need to send Form 1099-MISC. 

According to the IRS Instructions for Form 1099-MISC, "Payments made with a credit card or payment card and certain other types of payments, including third-party network transactions, must be reported on Form 1099-K by the payment settlement entity under section 6050W and are not subject to reporting on Form 1099-MISC. See the separate Instructions for Form 1099-K."

In short, PayPal will issue Form 1099-K to your contractor. So you do not need to send Form 1099-MISC.

Level 1

I paid a contractor (more than $600) through Paypal. Do I need to send them a 1099-MISC?

Thank you PatriciaV. Where would I report the payments I made to her if not via a 1099 MISC?
Level 12

I paid a contractor (more than $600) through Paypal. Do I need to send them a 1099-MISC?

PayPal will report the income to the contractor for you. Include in your business expenses for whatever services you received.
Level 1

I paid a contractor (more than $600) through Paypal. Do I need to send them a 1099-MISC?

Great, thank you for the quick answers. I appreciate your time!
Level 1

I paid a contractor (more than $600) through Paypal. Do I need to send them a 1099-MISC?

PayPal says they only issue 1099ks if there is more than $20,000
Level 1

I paid a contractor (more than $600) through Paypal. Do I need to send them a 1099-MISC?

So what to do?
Level 12

I paid a contractor (more than $600) through Paypal. Do I need to send them a 1099-MISC?

The burden of reporting payments through PayPal resides with the payment processor. For payments under the PayPal minimum, vendors are expected to report their own income. You do not need to prepare a 1099-MISC in this situation.
Level 1

I paid a contractor (more than $600) through Paypal. Do I need to send them a 1099-MISC?

If I own a construction business and fire a sub contractor to do a roof, plumbing etc. is a 1099 the proper way to annotate those payments?
Level 1

I paid a contractor (more than $600) through Paypal. Do I need to send them a 1099-MISC?

Yes