Husband got 1099'd in 2023 for him & another contractor both. He never 1099'd other guy due to him almost dying in a motorcycle wreck& now having brain damage what todo?

[Run242830]

It's his 1st year to not be an employee & was already unaware of what to do & now is refusing to help me get this filed. Combined their total earnings are $82,000. My husband's aren't even $60,000 if correct. The 82k will make us have to pay back our Marketplace insurance of $18,000 for the year also. I've got to be able to separate this & another get it off of there somehow. Paying a penalty is better than having to pay over $20k in income that wasn't ours. What can I do?

[tagteam]

Your husband is a nominee recipient and should proceed as follows:

Nominee/middleman returns.

Generally, if you receive a Form 1099 for amounts that actually belong to another person, you are considered a nominee recipient. You must file a Form 1099 with the IRS (the same type of Form 1099 you received) for each of the other owners showing the amounts allocable to each. You must also furnish a Form 1099 to each of the other owners. File the new Form 1099 with Form 1096 with the IRS Submission Processing Center for your area. On each new Form 1099, list yourself as the “payer” and the other owner as the “recipient.” On Form 1096, list yourself as the “Filer.” A spouse is not required to file a nominee return to show amounts owned by the other spouse. The nominee, not the original payer, is responsible for filing the subsequent Forms 1099 to show the amount allocable to each owner.

See https://www.irs.gov/instructions/i1099gi#en_US_2024_publink1000286907

[Opus 17]

It should be noted that "the other guy" is legally responsible to report and pay tax on all his income, even if he does not get a 1099 form.  And your husband can declare the payment to the other contractor as a business expense, even if your husband does not issue a nominee 1099.

Of course, the nominee 1099 is legally required and your husband can be fined for not issuing it.  He could still be fined for issuing it after the deadline, but he can ask for an administrative waiver of the penalty if he had a good reason for failing to file on time.

1099 forms can be e-filed through TurboTax, and there are several other web sites that will e-file 1099s for a few dollars, one copy goes to the IRS and a copy goes to the recipient.

If your husband does not know the social security number or EIN of his partner, and the partner will not cooperate, you won't be able to e-file the 1099.  You will have to file the 1099 on paper, but this requires special forms that you must obtain from the IRS or a business supply store--you can't print it out, you must only use the approved IRS form.  You would leave the SSN section blank but add the contractors name and address.  Here is an old discussion about how to issue a 1099 if you don't have the SSN or tax number of the subcontractor.

https://ttlc.intuit.com/community/taxes/discussion/how-can-i-issue-a-1099-misc-to-a-contractor-witho...