How Do I Issue a Corrected Form 1099?
Form 1099 is an Internal Revenue Service (IRS) form that taxpayers use to report specific types of payments. There is an entire series of these informational returns identified by letter, ranging from 1099-A through 1099-SA. However, business owners will commonly use Form 1099-MISC, the form required to report money paid to independent contractors.
The 1099-MISC form includes identifying information about the business filing, as well as the independent contractor who was paid. If an error is found in the information provided, the form must be corrected as soon as possible. Revised forms must be submitted to the IRS, state agencies, and the independent contractor.
To correct a 1099-MISC form after it has been filed, first identify the type of error as Type 1 or Type 2:
- A Type 1 error is an incorrect dollar amount, payee name, or code.
- A Type 2 error is a missing or incorrect taxpayer identification number or an invalid address reported.
Then, follow these steps to correct the erroneous information (all directions apply to both types of errors unless otherwise specified.)
1. Confirm the type of the error.
2. Reference the original 1099-MISC when preparing the correction. Correct information must be included exactly as it was on the original form.
3. Obtain another 1099-MISC form from the IRS. Do not use the online version, as it will not be accepted.
4. Obtain another 1096 form from the IRS. This is a cover sheet summarizing 1099 information. One 1096 will be required for every 1099-MISC corrected.
5. Enter the corrected information on the 1099-MISC, and check the "corrected" box at the top of this form. This tells the IRS that the form was previously filed.
- For a Type 1 error, provide the corrected information, then input the rest of the information exactly as it was reported originally.
- Type 2 errors do not allow for correction of any reported dollar amounts. Information should be corrected for a Type 2 error, but dollar amounts submitted on this corrected return should contain zeros only.
6. Complete Form 1096 with corrected information.
7. Mail the corrected copy to the independent contractor, to the IRS (using the address provided with the form instructions), and any required state tax departments.
You can order IRS forms online free of charge on the IRS website.
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