S corporations generally do not receive 1099 forms (1099-NEC or 1099-MISC) for services they provide.
The IRS exempts payments to corporations from 1099 reporting, unlike payments to individuals, sole proprietors, partnerships, or LLCs taxed as partnerships.
Key Exceptions to the General Rule
However, there are important exceptions: S corporations must still receive 1099s for certain types of payments, such as attorney’s fees, medical and healthcare payments, and other specific categories required by the IRS. These exceptions exist because the IRS treats certain payments as reportable regardless of the recipient’s tax classification. For example, payments to attorneys are almost always reportable, even if the law firm is structured as an S corporation. Similarly, payments for medical or healthcare services may trigger reporting requirements due to regulatory oversight in those sectors.
Practical Implications for Businesses
In short, if you pay an S corp for ordinary services like consulting, design, or construction, no 1099 is needed—unless the payment falls under one of the exception categories. From an operational standpoint, this means businesses should not rely solely on the vendor’s entity type when determining 1099 obligations. Instead, they should evaluate both the nature of the service and IRS reporting rules. A prudent approach is to collect a Form W-9 from all vendors upfront and review it carefully to identify whether any exceptions apply, reducing the risk of compliance errors or penalties.
