1099 Forms
Payroll Forms
STOCK OPTIONS
WAGE TAX FORMS
FORM 592-B
Tax Exempt Forms Due
ACA FORMS
1098 FORMS
1042 FORMS
480 FORMS
Extension Forms
Form 8027
Form 8868
Form 8955-SSA
5498 Forms
Form 2290
STATE FILINGS
STATE Payroll Forms
STATE ONLY FILING
File multiple returns through bulk upload and import data directly via QuickBooks, Xero, etc.
Create, validate, schedule, and deliver forms effortlessly from a single platform.
Manage multiple clients with a single sign-on and reduce operational workload with Tax1099.
Manage W-9, 1099-NEC, and other IRS forms for gig workers with our intuitive platform.
Verify Payees/Merchants with real-time TIN Matching and efile in bulk with our API.
Import and organize your trading data with our real-time data management.
Join Tax1099's affiliate program to offer your network a reliable eFiling solution and earn a generous commission
Developers of tax software and applications
TAX FORM FILING
Data Import & Management
USER & WORKFLOW MANAGEMENT
Validation & Checks
Tax Transcript
PRINT & DELIVERY
COMPLIANCE & security
ADDITIONAL FEATURES
Integrations
Check out our Product Tour for a smooth Tax1099 experience!
Acquire the help required from our support.
Visual guides to help you work with Tax1099
Stay up to date on the latestIRS updates.
Read the real-life success stories of our users.
Explore industry insights & latest updates
The A-Z list for tax-related terms & definitions.
Detailed guides for smarter tax compliance.
Listen to thought-provoking insights and discussions with experts.
Tools
You might have paid referral partners, affiliates, sales representatives, or other independent professionals to bring in customers or generate sales. These payments may need to be reported to the IRS on Form 1099-NEC when they meet the reporting requirements for nonemployee compensation.
Read on to understand in greater depth when referral fees and partner commissions may need Form 1099-NEC reporting.
A referral fee or partner commission is generally a payment made to an outside person or business for helping generate customers, leads, sales, or business opportunities. A referral fee or partner commission can have different names, but the reporting treatment depends on why you made the payment and who received it.
Here are some common examples of such fees and commissions:
You should also know that an employee who earns commissions is generally reported through Form W-2 rather than Form 1099-NEC.
The word “partner” can describe different types of business relationships a referral partner may be an independent person or business that receives payment for sending customers, leads, or sales your way.
A referral, affiliate, channel, or sales partner generally provides services to the business. Payments to these recipients may be reportable on Form 1099-NEC when the other reporting requirements are met. An actual partner in a partnership is treated differently. Payments or allocations to a partner are generally handled under partnership tax reporting rules rather than as ordinary nonemployee compensation on Form 1099-NEC. Partnership reporting may include Schedule K-1.
Employees should also be kept separate from independent referral partners. When an employee earns a commission or referral bonus as part of their employment, that compensation is generally reported on Form W-2 rather than Form 1099-NEC.
Before you start preparing a 1099, confirm if the recipient is an independent service provider, employee, or actual owner/partner.
A payer generally needs to report non-attorney referral fees or partner commissions on Form 1099-NEC when the payment meets the requirements for reportable nonemployee compensation.
The main conditions to check are:
Payments made for personal purposes generally do not fall under these business reporting requirements. The payer should also distinguish referral or commission payments from employee compensation and payments made to an actual business partner, since those relationships can be subject to different reporting rules.
Once you determine that a payment is reportable, the next step is checking whether the total paid during 2026 reaches the $2,000 federal threshold.
A business generally has to report all qualifying referral fees, commissions, and similar payments on Form 1099-NEC when the total paid to the same recipient reaches $2,000 or more during the calendar year, assuming that all other reporting requirements are met.
This threshold only applies to the total qualifying payments made to the recipient during the year, rather than to each individual payment.
The 2026 threshold is higher than $600 for certain payments, so you should use the rules applicable to the payment year when reviewing your records.
For reportable referral fees and partner commissions, the amount of qualifying nonemployee compensation is generally reported in Box 1a of Form 1099-NEC. This can include payments such as referral commissions, finder’s fees, affiliate commissions, independent sales commissions, and lead-generation fees when they meet the reporting requirements.
The first thing to do is to add all the qualifying payments made to the same recipient during the calendar year, so there is nothing missed. And also, before you start filing, it’s recommended that you reconcile this amount against your accounting and payment records. Then check for repayments, adjustments, or other changes that could affect the total amount reported.
The way you pay a referral partner can affect who is responsible for information reporting. Payers should separate payments made directly from payments processed through credit cards, payment cards, or qualifying third-party networks.
Payments made directly by check, ACH, bank transfer, or similar methods may count toward the payer’s Form 1099-NEC reporting total when the other requirements are met.
Payments that are made through credit cards, payment cards, or qualifying third-party settlement networks are generally handled under different information-reporting rules, with the payment settlement entity generally responsible for reporting them on Form 1099-K.
Before filing Form 1099-NEC, collect a completed Form W-9 from each referral partner or commission recipient. Use the information provided to confirm:
Also, check whether the recipient qualifies for a reporting exemption. For example, an LLC is not automatically exempt, so the payer should rely on the tax classification provided on Form W-9 rather than the business name alone.
If a referral partner does not provide a valid taxpayer identification number (TIN) or the payer receives an IRS notice regarding an incorrect TIN, the payer may need to apply 24% backup withholding on reportable payments. The withheld amount is generally reported in Box 4 of Form 1099-NEC.
A filing requirement can also be created when backup withholding applies, even if the payment is below the usual $2,000 threshold. So to avoid such issues, it’s better to request Form W-9 before making payments and then review the name and TIN information before filing.
Before you file 1099-NEC forms, check your records to see if:
Once you have reviewed your referral payments and recipient information, you can prepare and file the required 1099-NEC forms with Tax1099.
Tax1099 supports the filing workflow from recipient information and verification through e-filing, recipient delivery, status tracking, and corrections.
Sometimes. A referral fee paid to someone who is not an employee may need to be reported on Form 1099-NEC once the payment reaches the reporting threshold.
For 2026 payments, you generally need to file Form 1099-NEC if you paid the same nonemployee $2,000 or more for qualifying services. Add up all payments made to that recipient during the year to see if the threshold is met.
Referral fees and commissions paid to a nonemployee are generally reported in Box 1a.
No. It depends on how much was paid, who received the payment, and how the payment was made. Some payments may also be exempt from Form 1099-NEC reporting.
Generally, not for payments received in their capacity as partners. Those payments normally follow partnership reporting rules.
Referral Fees Paid? Make Sure the Right 1099 Gets Filed Manage referral and commission 1099s from one place with Tax1099. Match TINs, eFile returns, deliver recipient copies, track filing status, and handle corrections without moving between separate tools. File Referral & Commission 1099s with Tax1099
Manage referral and commission 1099s from one place with Tax1099. Match TINs, eFile returns, deliver recipient copies, track filing status, and handle corrections without moving between separate tools.