Do we issue a 1099 to a temporary employee (these employees work for a temp agency) for expense reimbursement?

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In such a case, provided that the temp worker is under an accountable plan and has provided receipts for the expenses to be reimbursed, then no, you do not have to issue a 1099. If, however, the temp worker incurred expenses under a non-accountable plan, and if reimbursement is equal to or more than $600 for the year, then you should issue a 1099.

For definitions of accountable and non-accountable plans, see IRS Publication 463, page 28.

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