Do I have to complete a 1099 Misc. for personal care paid to an individual?

[goldiegirl56]

I paid about $2,000 in 2016 to an individual for personal care for my chronically ill husband.  I itemized the expense in the medical expenses section but did not complete a 1099 Misc.  The caregiver is asking me for a 1099 but I've already filed my return.  

[rjs · Accepted solution]

No, you do not issue a 1099-MISC. Form 1099-MISC is only for payments you make in the course of your business. It is not for personal payments.

Some people mistakenly think that they need a 1099-MISC in order to report the income on their own tax return. They do not. They can and should report it based on their own records of how much they were paid. Apparently your caregiver is one of the people who has this misunderstanding.

[goldiegirl56]

Thank you rjs.  Appreciate the quick response.

[michellefromthe-rez]

rjs I have a question for you? I work for several people who pay me less than $1900.00 a year but it totals out to be like 13 or 14000.00 thousand a year and turbo tax put it on line 7 hsh but now IRS is questioning the income because it is on line 7 telling me I am self employed and need to amend my return etc. and I am not self employed., I help the elders out on our Indian reservation, they pay me the amount they want I do not charge them by the hour or anything, they supply everything I may need to do what ever they ask of me... Is there some kind of publication or something that I can send to IRS regarding the questions they are asking me about my income., and do you know if I have to file a amended return for my cash wages or be self employed, I am not selfemployed I just would like to inform these IRS people that I talk to on the phone that I am able to file my return this way.  Thank You for your help , Michelle

[poetesq]

Champ - can GoldieGirl56 deduct the $2000 without the complimentary 1099-misc?

[rjs]

@poetesq 

Not having issued a 1099-MISC will not prevent goldiegirl56 from deducting the expense. If it's a valid medical expense she can deduct it if she itemizes deductions. She needs a record of the payments, just like for any other medical expense.

Whether the "personal care" qualifies as a medical expense is a separate question, and we don't have enough information to determine that. Only the cost of "nursing services" is deductible as a medical expense. The cost of "personal and household services" is not deductible under any circumstances.

[RRL1]

I will be paying my niece to take care of my mother and she is requesting a 1099 as it will be needed for her to prove income for her mortgage.  If I don't use a 1099, how do we satisfy this need?  

[DianeW777]

First you must determine if your niece is considered a household employee. The IRS link below will help make that determination.  In this situation a W-2 is required to be issued.

• Topic No. 756 Employment Taxes for Household Employees

If you decide your niece is not a household employee, then you could provide a letter to the lender stating and verifying the payments she is or was paid for her services.

As stated in an earlier post in this thread you are not required to file information return(s) such as Form 1099-NEC, if any of the following situations apply:

• You are not engaged in a trade or business.
• You are engaged in a trade or business and
  • the payment was made to another business that is incorporated, but was not for medical or legal services or
  • the sum of all payments made to the person or unincorporated business is less than $600 in one tax year
    • Who is required to issue Forms 1099?

@RRL1

[rjs]

@RRL1 

The IRS Instructions for Forms 1099-MISC and 1099-NEC say the following.

"Trade or business reporting only. Report on Form
1099-NEC only when payments are made in the course of
your trade or business. Personal payments are not
reportable."

It says the same thing for Form 1099-MISC. I take that to mean not only that you are not required to issue a 1099 for personal payments, but that you are not supposed to issue a 1099.

Lots of independent contractors get income without a 1099. If you pay a painter, plumber, or other contractor to do work in your home, you don't give them a 1099. But painters, plumbers, and other independent contractors get mortgages. The mortgage lender must have some way of handling people whose income is not reported on a W-2 or a 1099.

[DFH]

Hi @rjs 

Your response to this question was made in 2019, which I believe was prior to the introduction of Form 1099-NEC, where NEC stands for Non Employee Compensation.  I understand that Form 1099-MISC is no longer to be used for payments to non-employees, regardless of the payer's status.

Do you also believe that Form 1099-NEC "is only for payments you make in the course of your business. It is not for personal payments."?  If so, could you provide a citation to an IRS publication or instruction that supports your belief?

[ShirlynW]

Yes. Form 1099-NEC, Nonemployee Compensation, is a form business owners use to report nonemployee compensation. Only use this form to report nonemployee compensation to independent contractors. Do not report other types of payments.

For more information

[rjs]

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@DFH wrote:

Hi @rjs 

Do you also believe that Form 1099-NEC "is only for payments you make in the course of your business. It is not for personal payments."?  If so, could you provide a citation to an IRS publication or instruction that supports your belief?

---

@DFH 

Read the post immediately above yours in this thread. The following is copied and pasted from that post.

The IRS Instructions for Forms 1099-MISC and 1099-NEC say the following.

"Trade or business reporting only. Report on Form
1099-NEC only when payments are made in the course of
your trade or business. Personal payments are not
reportable."