Does an S corp get a 1099-NEC?

Not for ordinary service payments. Clients who pay your S corp for consulting, design, or similar services do not issue a 1099-NEC. The one service-type exception is legal services: attorney fees of $2,000 or more in 2026 must be reported on Form 1099-NEC, Box 1, even when the law firm is an S corp.

Do I need to send a 1099 to an S corp contractor?

Usually not. If a vendor checks “S corporation” on their W-9, you can generally skip the 1099 — unless you paid them for legal or medical services. Still collect the W-9 before payment: it proves you relied on the vendor’s stated classification.

What is the 1099 reporting threshold for 2026?

For payments made in 2026, the general threshold is $2,000 — up from $600 — under the One, Big, Beautiful Bill Act, and it adjusts for inflation from 2027. Gross proceeds paid to attorneys keep the $600 threshold, and Form 1099-K returns to more than $20,000 and more than 200 transactions.

Does an S corp have to issue 1099s to its own contractors?

Yes. The corporate exemption only protects the S corp as a recipient. As a payer, your S corp must issue 1099-NECs to individual, sole-proprietor, and partnership contractors paid $2,000 or more in 2026 — the same as any other business.

Taxes

Do S Corps Get 1099? The 2026 Reporting Rules Guide

Q: Do S corps receive a 1099?

Generally no. The IRS exempts payments to corporations — including S corporations — from most 1099 reporting, because the S corp already reports its income on Form 1120-S. Exceptions exist: attorney fees, gross proceeds paid to attorneys, medical payments, and certain other payments still trigger a 1099 to a corporate recipient.

Do S corps get 1099 forms from their clients? Usually not — the IRS’s corporate exemption keeps payments to corporations off the 1099 system. But 2026 brought a major threshold change, and several payment types still pierce the exemption.

MKD Editorial Team October 23, 2026 6 min read Figures checked 23 Oct 2026

Tax forms and paperwork arranged on an office desk, representing S corporation 1099 reporting rules — Most payments to an S corporation never touch the 1099 system — the exceptions do.

Key takeaways

Payments to corporations — including S corps — are generally exempt from 1099-NEC and 1099-MISC reporting.
For 2026, the general reporting threshold rose from $600 to $2,000 per Public Law 119-21.
Exceptions still force a 1099 to an S corp: attorneys’ fees, gross proceeds to attorneys, medical payments, certain federal agency payments, and card transactions on 1099-K.
The exemption works one way — your S corp still issues 1099-NECs to the unincorporated contractors it pays, and shareholder-employees take wages on a W-2.

Does an S corp get a 1099? The corporate exemption, explained

The short answer to “does an S corp get a 1099” is almost always no. The IRS General Instructions state it plainly: “Generally, payments to corporations are not reportable.” An S corporation is a corporation — the pass-through election changes how income is taxed on Form 1120-S, not its legal form — so the exemption covers it exactly as it covers a C corporation.

What changed in 2026 is the dollar trigger. Public Law 119-21 raised the general 1099 threshold from $600 to $2,000 for 2026 payments, inflation-adjusted from 2027. That changes nothing about who is exempt — an S corp client was exempt at $600 and stays exempt at $2,000 — but it shrinks the filing workload wherever a form is still due.

Do S corps receive a 1099? The exceptions that say yes

Three matter most to S corp owners. Attorneys’ fees and legal settlements. Payments for legal services go on Form 1099-NEC, Box 1 — even when the firm is an S corporation. Gross proceeds paid to attorneys (settlement funds disbursed to counsel) go on Form 1099-MISC, Box 10. Thresholds split here: attorney fees follow the new $2,000 threshold for 2026 payments, while gross proceeds to attorneys keep the old $600 threshold.

Medical and health care payments. Medical services at or above the reporting threshold go on Form 1099-MISC, Box 6 — corporate status does not matter. If your S corp is a medical practice or lab, expect these forms.

Two more exceptions: federal executive agencies must still report service payments to corporations, and card or network payments are reported on Form 1099-K by the processor at a restored threshold of more than $20,000 and 200 transactions for 2026. Backstop: no correct taxpayer ID means the payer withholds 24% and files a 1099 anyway.

A business making a payment to another company, showing when a payer must issue a 1099 to a corporation

Your S corp as the payer: when you must issue 1099s

The exemption protects you as a recipient, not as a payer. If your S corp pays an independent contractor $2,000 or more in 2026 and that contractor is an individual, sole proprietor, or partnership, you must issue them a 1099-NEC. Collect a signed W-9 from every vendor before the first payment — it reveals their tax classification and hands you the taxpayer ID you need. Card and network payments skip your 1099-NEC duty (the processor files 1099-K), and payments for goods or freight are not reportable at all.

Shareholder-employees get W-2s, not 1099s

If you work in your own S corp, your pay arrives as wages on Form W-2 — never as contractor pay on a 1099. Shareholder-employees who perform services must take reasonable compensation as wages, with Social Security and Medicare handled through payroll. For the full breakdown, see our guide to what OASDI tax is.

Distributions of remaining profit sit on top of wages (on Schedule K-1, not a 1099) and escape payroll tax — which is why the IRS polices the line. Zero wages plus all distributions is one of the fastest ways to draw an audit. If you run payroll for yourself and a small team, our Texas paycheck calculator guide shows how wages, withholding, and take-home pay fit together.

A worked example: three payments, three outcomes

A client pays your consulting S corp $5,000 for a strategy project. No 1099 — the corporate exemption applies, so the $2,000 threshold never comes into play. The $5,000 is still business income and belongs on your Form 1120-S, form or no form.

The same client pays a law firm organized as an S corp $5,000 for contract work. The client must issue a 1099-NEC, Box 1: the attorney exception overrides the exemption, and $5,000 clears the 2026 threshold.

Your S corp pays a freelance designer (a sole proprietor) $2,400 for a brand refresh. You issue her a 1099-NEC. As the payer, the exemption does not protect you — she is unincorporated, and $2,400 clears the 2026 threshold.

Bottom line

Do S corps get 1099s? Rarely — the corporate exemption is real, and 2026’s $2,000 threshold makes the 1099 system quieter still. But “rarely” is not “never”: attorney fees, gross proceeds, and medical payments still generate forms to corporate payees, while your S corp’s own contractor payments stay reportable. Keep W-9s current, pay shareholder wages on a W-2, and report every dollar of income whether a form arrives or not — and our guide to SALT deductions covers the state and local layer.

Keep every tax form in its lane

One missed 1099 deadline can cost more than a year of careful bookkeeping.

Read the SALT deductions guide

Sources & further reading

IRS — Am I Required to File a Form 1099 or Other Information Return?$2,000 threshold for 2026 payments; corporate exemption with medical/legal exceptions (curl: 200, 23 Oct 2026).
IRS — General Instructions for Certain Information Returns“Generally, payments to corporations are not reportable” (§P) plus the full exception list: attorneys’ fees, medical payments, 1099-K (curl: 200, 23 Oct 2026).
IRS — S CorporationsPass-through status; income reported on Form 1120-S by shareholders (curl: 200, 23 Oct 2026).
Tax1099 — 1099 for S-corp: Filing Requirements and Exceptions 2026Exception table; attorney gross proceeds stay at $600; 24% backup withholding (curl: 200, 23 Oct 2026).
LegalClarity — Who Do You Issue a 1099 To? Thresholds and Exemptions1099-K threshold restored to more than $20,000 and more than 200 transactions for 2026 (curl: 200, 23 Oct 2026).
TaxBandits — W-9 for Corporations: C-Corp & S-CorpS corp W-9 classification; exempt payee code 5 for backup withholding (curl: 200, 23 Oct 2026).