Vendor who says he is a "S" Corp, but not filing as such because he has no employees. He has an EIN for the corporation. Do we send him a 1099 based on his personal name and SSN#, or do we treat him as a corp with no 1099?


Your vendor may be unclear on how best to complete the W-9. If the vendor is an S-Corp and has an EIN, then he should provide you the corporate name and the EIN. Then the vendor is exempt from 1099 reporting. However, if the vendor provides his personal name and social security number, you will have to issue a 1099 to him.

A related issue: to whom are you writing the check? This is a key point. If the check is made payable to the company but you report payment to the individual, you will have a mismatch, since the 1099 should go to the payee. In this case, the IRS would send you a notice indicating the discrepancy. (i.e., the payee on the check and the 1099 must match; furthermore, whichever is the payee, you must use the corresponding TIN.)

Generally, a corporation would want to use the corporate name and EIN, and avoid 1099 reporting. But if the check is to be made to the individual, and you have the individual's name and social security number, it can be done that way—but you must issue a 1099 to the individual.

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