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If you make a mistake on Form 1099, you can make a correction.

How to Issue a Corrected Form 1099-MISC

Depending on your business, you might need to file Form 1099-MISC. If you make a mistake on this information return, you must correct it as soon as possible. Learn how to issue a corrected 1099.

What is Form 1099-MISC?

Form 1099-MISC, Miscellaneous Income, is an information return you must file to report certain payments you made to individuals who aren’t your employees. The form contains information about your business and the miscellaneous payments you made.

The most common reason for filing Form 1099-MISC is to report nonemployee compensation for independent contractors you hired.

Form 1099-MISC works similarly to Form W-2. When you have employees, you must send Form W-2 to them so they can file their personal tax returns. Likewise, you must send Form 1099-MISC to independent contractors or 1099 vendors you paid $600 or more to during the previous year so they can file their taxes.

Who gets Form 1099-MISC?

There are several copies of Form 1099-MISC you need to worry about. You must send copies of Form 1099-MISC as follows:

  • Copy A: IRS
  • Copy 1: State tax department (if applicable)
  • Copy B: Independent contractor
  • Copy 2: Independent contractor
  • Copy C: Your records

When you file Form 1099-MISC with the IRS, you must also send Form 1096, Annual Summary and Transmittal of U.S. Information Returns. Form 1096 is a summary of all the Forms 1099-MISC you filed.

How to issue a corrected 1099

If you made a mistake, you need to know how to correct a 1099 form. Corrected 1099-MISC forms must be submitted to the IRS, independent contractor, and state agencies (if applicable). And, you will need to correct Form 1096.

You might be wondering, How do I correct a 1099 easily? Correcting a 1099 shouldn’t take up too much of your time, once you know how to do it.

The 1099 correction form is the same as the original form. You will use Form 1099-MISC and mark the box next to “CORRECTED” at the top.

You can order new copies of Form 1099-MISC from the IRS. Never print the online version that is for informational purposes only. The IRS will mail you copies of Form 1099-MISC after you place an order.

When you issue a corrected 1099, make sure you do not cut or separate forms, staple the forms to Form 1096, or send corrected returns to the IRS if you are only correcting state or local information. Also, don’t include a copy of the original return that was filed incorrectly.

How you issue a 1099 correction depends on the type of error. The IRS splits errors into two categories, Type 1 and Type 2.

Learn how to correct Form 1099 based on the type of error. Keep in mind that these instructions apply to filing corrected returns on paper. For help correcting returns electronically, view Publication 1220.

corrected 1099

Type 1 Errors

If you reported incorrect money amounts, code, or checkbox, or if you filed a return when you should not have filed it, you made a Type 1 Error.

To correct a Type 1 Error, you will need to do the following.

  1. Prepare a new Form 1099-MISC
  2. Enter an X in the “CORRECTED” box
  3. Include the correct information (money amount, code, or checkbox). Report other information like you did in the original return
  4. Prepare a new Form 1096 with corrected information (to send with the IRS’s copy of Form 1099-MISC)
  5. Mail the corrected Form 1099-MISC to the independent contractor, IRS, and any required state tax departments

Type 2 Errors

Type 2 Errors occur when taxpayer identification numbers are missing or incorrect, or when the payee’s name is incorrect.

You will need to do the following to correct a Type 2 Error. Type 2 Errors are broken down into two steps.

Step 1: Identify the incorrect return submitted

  1. Prepare a new Form 1099-MISC
  2. Enter an X in the “CORRECTED” box
  3. Enter the payer, recipient, and account number information exactly as it appeared on the original incorrect return
  4. Enter 0 for all money amounts

Step 2: Report correct information

  1. Prepare a new information return
  2. Do not enter an X in the “CORRECTED” box
  3. Include all the correct information
  4. Prepare a new Form 1096 with corrected information (to send with the IRS’s copy of Form 1099-MISC)
  5. Include one of the following phrases in the bottom margin of Form 1096: “Filed To Correct TIN,” “Filed To Correct Name,” or “Filed To Correct Return”
  6. Mail the corrected Form 1099-MISC to the independent contractor, IRS, and any required state tax departments
Download our free guide, Get the Lowdown on Form 1099-MISC, to learn more about your Form 1099-MISC responsibilities!

Looking for a way to simplify your responsibilities? Patriot’s online 1099 software lets you create and print unlimited Forms 1099-MISC and 1096. Get your free trial now!

This article has been updated from its original publication date of 1/8/2013. 

This is not intended as legal advice; for more information, please click here.

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