Is There a Penalty for Filing a Corrected 1099 Form?

It is natural to wonder: Is there a penalty for filing a corrected 1099 form?

No software can prevent human errors on tax forms.

Certain programs help reduce the risk of making redundant mistakes. Submitting any form with consistent errors may lead to the Internal Revenue Service issuing penalties. Your business will likely encounter penalties for submitting corrected forms. It is still better to address any mistakes sooner rather than later. Waiting for a longer period of time will increase the chance of high fines or more severe penalties for your company.

Advanced Micro Solutions supports small businesses. Users can generate many 1099s, W-2s, and related forms. Our software can help you prepare to file any corrected form. Our W-2/1099 Forms Filer base program minimizes the risk of making mistakes. Our easy-to-use, menu-driven format saves people time, money, and resources rather than wondering if there is a penalty for filing a corrected 1099 form.

Penalties for Correcting a 1099 Form

All businesses must submit a corrected 1099 form if they make an error on their original form. The IRS will issue some penalty depending on:

• The type of error

• Whether the error was intentional

In 2025, accuracy-related penalties are generally 20% of the portion of an underpayment of tax that is linked to:

• Negligence

• Disregard of rules or regulations

Substantial understatements will lead to the accuracy-related penalty being 20% of the portion of the underpayment of tax.

Keep in mind that submitting a form with the wrong information is not the only type of error. Any business that misses a tax deadline will incur a penalty. The IRS will charge $60 for information returns or payment statements up to 30 days late that are due in 2026.

There is no maximum penalty for businesses that intentionally disregard filing deadlines.

Is There a Penalty for Filing a Corrected 1099?: How to Amend

It is not unusual to discover a mistake after you filed your 1099 forms. Employers will sometimes even make errors due to contractors including the wrong information on their Form W-9. Fix any of your forms in a timely fashion by:

• Step 1: Filling out an accurate Form 1099

• Step 2: Including it with a Form 1096 if you mail it

• Step 3: Putting a checkmark at the top of the new 1099 form in the “corrected” box

Do not include a copy of your original Form 1099. Save even more time and amend any of your errors when you choose e-filing as your filing method.

Understand the different ways to amend inaccurate Form 1099s based on the IRS’ Type 1 and 2 categories. Knowing the extent of an error will inform you of the severity of a penalty for filing a corrected 1099 form.

Type 1 Errors

The first type of error includes reporting incorrect money amounts, any wrong codes or checkboxes, or mistakenly filing a return. The steps to follow are:

• Step 1: Prepare a new 1099-NEC form and check off the “corrected” box.

• Step 2: Record the accurate information and anything else that was on the previous form.

• Step 3: Include a new Form 1096 with all of the accurate information if you mail an amended form. Otherwise e-file just a new Form 1099 using tax preparation software.

Type 2 Errors

The second error classification is if a business omits the Taxpayer Identification Number. A business may also input the wrong information, such as the wrong payer name or a wrong payee TIN. The steps of the process are:

• Step 1: Prepare a new 1099-NEC form and check off the “corrected” box. Do this step regardless of how much of a penalty there is for filing a corrected 1099 form.

• Step 2: Input the payer, recipient, and the account number details as entered on the original wrong form.

• Step 3: Enter the correct information and then put zero for all of the money figures.

• Step 4: Put “filed to correct SSN” or “filed to correct name” at the top of any Form 1096s.

• Step 5: Mail the corrected forms to the IRS and any other specified departments.

• Step 6: Give the corrected Form 1099-NECs to the appropriate independent contractors.

Frequently Asked Questions

• When are corrected 1099 forms due? – There is no hard deadline for when you should file 1099 corrected forms, but you should file forms as soon as you notice or are made aware of an issue. Submit the amended forms within three years of an initial filing date.

• Can I electronically file corrected 1099 forms? – Yes, you can e-file corrected 1099 forms as long as you have software that supports the e-filing process.

AMS Solutions for 1099 Accuracy

Reduce any frequent 1099 filing mistakes with Advanced Micro Solutions. Our software lets all users input data onto entry screens that resemble 1099 forms. Software cannot prevent all tax filing mistakes, but we equipped our program with a Default command. Users “define” default values for any form, like a:

• State Code

• ID

AMS has an SSN verification file. Verify workers’ Social Security numbers with the Social Security Administration.Avoid spending too long wondering if there is a penalty for filing a corrected 1099 form. Try finding solutions to avoid filing corrected forms or make the process quicker when there is no alternative. Download our free 1099-etc Demo software to learn how our system works or call us directly at 1-(800)-536-1099 with questions.