Corp to corp reporting requirements
Submitted by Anonymous on Mon, 2007-02-26 12:38.
Hi all,
I am a S-corp. I want to hire another s-corp to work for me. I know I'm not required to file a 1099-M...but if not...how do the feds know what amount the S-corp I employed should report as income?
S-Corp to S-Corp Reporting
No, You don't need to file a 1099-Misc.
The 1099-Misc reporting requirements are to any entity that you pay $600 or more in a calendar year for business services. The exception is you are not required to file a 1099 for payments made to corporations. The exception to the exception is payments for legal or medical services, even to a corporation.
Technically, the IRS doesn't really know what your subcontractor should report. Given the tax gap & the IRS's push for more third-party reporting, I'd wouldn't be surprised if the 1099-Misc reporting exception for corporations goes away in the next few years.
Hope this helps.
L:)