Do General Contractors Send 1099s to Subcontractors?

Do general contractors need to send 1099s to subcontractors? In most cases, yes. Payments to independent subcontractors for services are reported on Form 1099-NEC once they reach the annual threshold.

For 2026, that threshold rises from $600 to $2,000. This guide explains the subcontractor 1099 requirements general contractors need to know, from qualifying payees to filing deadlines.

When Does a General Contractor Send Form 1099-NEC to a Subcontractor?

Do contractors send 1099s to subcontractors in every case? No. For 2026, Form 1099-NEC applies only when:

• The payment was made in the course of the general contractor’s trade or business.
• The subcontractor is not an employee.
• The contractor paid for services provided by the subcontractor.
• The subcontractor is an individual, partnership, or estate. Certain payments to corporations also need to be reported.
• Payments for the subcontractor’s services totaled $2,000 or more in 2026, or federal income tax was withheld under backup withholding rules.

Qualifying nonemployee compensation is reported in Box 1a, which replaces Box 1 used on earlier versions of the form.

What Is the Form 1099-NEC Threshold for 2026?

The One Big Beautiful Bill Act (OBBBA) raised the subcontractor 1099 threshold starting in 2026.

OBBBA also moves most 1099-MISC payments to $2,000. Exceptions include royalties ($10), substitute payments in lieu of dividends or tax-exempt interest ($10), and gross proceeds paid to an attorney ($600).

Which Construction Subcontractors May Need Form 1099-NEC?

Common payees that may need a construction subcontractor 1099 include:

• Electricians, plumbers, carpenters, roofers, and painters
• HVAC contractors
• Concrete, masonry, and excavation subcontractors
• Independent equipment operators
• Construction consultants and freelance estimators
• Architects and engineers providing independent services
• Attorneys providing legal services

Entity type still matters. Incorporated architects and engineers may be exempt, while attorneys are not.

Also, calling someone a “subcontractor” in a contract does not automatically make them an independent contractor. The actual working relationship determines the classification. If the worker is legally an employee, their payments should be reported on Form W-2.

Which Subcontractor Payments Require a 1099?

The table below applies the federal rules on 1099 for construction contractors to common 2026 payments.

Payments to corporations are generally exempt, but legal fees remain reportable even when the law firm is incorporated.

An LLC is not automatically exempt its treatment depends on the federal tax classification shown on its Form W-9.

Do General Contractors Issue 1099s for Credit Card Payments?

Not for the card-settled portion. Card payments are reported on Form 1099-K by the payment settlement entity, so the contractor should not duplicate them on Form 1099-NEC.

Split-Payments

Let’s understand what to do about split payments with an example. In 2026, a roofing subcontractor gets $4,000 by ACH and $3,500 via business credit card.

Only the $4,000 paid by ACH counts toward Form 1099-NEC reporting because card payments are reported on Form 1099-K. Since the ACH payments exceed $2,000, the contractor reports $4,000 in Box 1a, not $7,500.

Are Materials Included on a Subcontractor’s 1099?

Under IRS instructions, nonemployee compensation includes parts or materials used to perform a service when supplying them is incidental to the service. Listing materials as a separate line item does not make an invoice partly exempt.

Scenario: Service Contract

A roofing subcontractor charges $9,000 for labor and $5,000 for supplies. The general contractor often reports the entire $14,000 in Box 1a since the materials are provided as part of the roofing job.

Scenario: Merchandise-Only

Buying $5,000 of lumber from a building-supply vendor, with no installation services, is a merchandise purchase and not reportable on Form 1099-NEC.

Why Should General Contractors Collect Form W-9 From Subcontractors?

Instead of collecting Form W-9 during filing season, do so during subcontractor onboarding, prior to the first payment.

It collects:

• Legal name and business or DBA name
• Address
• SSN or EIN
• Federal tax classification, including LLC tax classification when applicable

Accurate W-9 data reduces name and TIN mismatches when preparing 1099-NEC for subcontractors.

What Happens If a Subcontractor Does Not Provide a Valid TIN?

If a subcontractor does not provide a valid taxpayer identification number (TIN), the contractor may have to apply 24% backup withholding to certain payments.

In this situation, the contractor must report the backup withholding on Form 1099-NEC, including the withheld amount in Box 4. Backup withholding can also apply when the IRS notifies the payer that a TIN is incorrect.

When Do General Contractors Need to Send and File Form 1099-NEC?

For 2026 payments filed in 2027:

January 31, 2027, falls on a Sunday, so the deadline moves to the next business day.

When Is Electronic Filing Required?

10-Return Rule: A contractor filing 10 or more information returns in aggregate, counting all types such as 1099s and W-2s, must file electronically.

For tax year 2026, Forms 1099-NEC filed electronically must go through IRIS. The IRS is retiring FIRE, which will not accept submissions in the 2027 filing season.

Do General Contractors Have Separate State 1099 Filing Requirements?

Possibly. Not every state’s reporting requirements are satisfied by complying with federal contractor 1099 regulations. State regulations may vary in:

• Reporting thresholds
• State income tax withholding
• Direct state filing obligations
• Electronic filing requirements
• Filing deadlines

Examine each applicable state’s regulations after confirming the federal general contractor 1099 requirements.

Frequently Asked Questions About 1099s for Subcontractors

1. Do I need to send a 1099 if I hire the same subcontractor for multiple jobs?

Yes. Add up the payments made to the subcontractor for all jobs during 2026. If the total reaches $2,000 or more, file and furnish Form 1099-NEC by the deadline.

2. Do I need a separate 1099 for each construction project?

Generally, no. A 1099 for subcontractors is based on total payments to each payee for the calendar year, not on individual projects.

3. What if I paid the same subcontractor from more than one business?

Payments are not combined across separate legal payers. Each business that is a separate legal payer should review its own payments and reporting obligations independently.

4. Do I need to send a copy of Form 1099-NEC to the subcontractor?

Yes. The contractor must furnish a copy to the subcontractor by February 1, 2027, for 2026 payments.

5. Can I send Form 1099-NEC to a subcontractor before the deadline?

Yes, once the year’s payment information is complete and accurate.

6. What if I discover an error after sending Form 1099-NEC?

File a corrected Form 1099-NEC with the IRS and furnish a corrected copy to the subcontractor.
Electronically filed originals must be corrected electronically unless the IRS approves a waiver.

Several Subcontractors. Different Jobs. One Place to File Their 1099s.

Tax1099 helps contractors collect W-9s, verify TINs, upload payment details, eFile Forms 1099-NEC, and send copies to subcontractors.

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