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1099 to LLC S-Corp?

pvel3pvel3 Member Posts: 4

Based on the 1099 Instructions, an LLC treated as an S-Corp does not receive 1099's. One of my subcontractors returned their W-9 as LLC with "S" Classification, and stated "As we are an LLC, (not incorporated) you should be sending us a 1099." They're a larger professional company with an accounting department, but are they correct or incorrect on this?

Thank you!

edited March 30, 2021 in Accounting Technical Support

Comments

  • MikegMikeg Member Posts: 995 ✭✭✭

    @pvel3,
    You are not required to issue them one but you can if you wish. The reason why an LLC that has elected S-Corp is not required to be issued a 1099 is because the moment they file 2553 Election to be treated as an S-Corp, they are actually converted from an LLC to a C-Corp and then given S-Corp status by the IRS. If they ever revoke the S-Election, they are by default treated as a C Corp by the IRS. Hence, C-Corps are not required to be issued a 1099.

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