What is a Federal 1099 form?

In so much that the forms are published by, the rules and regulations are set by, and the data is primarily collected by the IRS, any 1099 form is a federal 1099 form. But, of course, as many people already know, the states can require that you send them this same 1099 information so they can record any relevant income payments as well as assessing and collecting any resulting tax liability. Sounds simple, right? Except it’s anything but, especially for the increasing number of businesses that conduct their 1099-related business across state lines.

State vs. Federal Form Copies

There is no easy, definitive way to explain the applicable rules of the tax code, especially once you start breaking it down state-by-state. Seven states have no income tax at all. Another two states, New Hampshire and Tennessee, only have interest and dividend income tax. But in general terms, it’s easiest to explain the differences and guidelines by looking at how each copy of the federal 1099 form is used:

  • Federal 1099 Form Copy A and State 1099 Form Copy 1: Copy A is sent directly to the IRS; Copy 1 is filed with the relevant state tax agency, where necessary. As a good rule of thumb, you only have to file 1099 form copy 1 with the state tax agency if you actually withheld state income tax from the recipient. If you do intend to withhold state income tax, for 1099-MISC contract work for example, it should be in the state for which the services were performed. Note: You may be able to avoid this scannable red-ink 1099 copy altogether if your business e-files with the IRS and state tax agency. In fact, some states actually require businesses to e-file.
  • Federal 1099 Form Copy B and State 1099 Form Copy 2: These copies are sent to the recipient, and it’s then the recipient’s responsibility to file the forms with the relevant tax agency. Even if you know the recipient’s state has no applicable income tax, it’s still not a bad idea to send in the completed information. It’s also worth pointing out that although this is Copy B/Copy 2, it’s actually the first filing that’s due (end of January).
  • 1099 Form Copy C: This one you keep for your own records. Chances are you’ll never need them, but should that day ever come, not having them could be a real disaster. Put another way, do you really trust the IRS to maintain an accurate copy of your tax files? Do you really want to take the agency’s and auditor’s word that the information they have for you is correct? Don’t be remiss about this part of your business filing.

Get AMS Software for Your 1099 Filings

The W-2/1099 Forms Filer can help you sort through these different copies. It can also help you e-file Copy A and Copy 1, while printing your own blank Copy B and Copy 2 forms on plain, white paper. This software solution includes support for all 50 states, DC,, along with e-file software, for those states that require this type of electronic transmission.

This platform offers intuitive, menu-driven performance, but it also creates an advanced module interaction that enables our customers to build custom software packages at cost-effective prices:

  • W-2/1099 Forms Filer (required platform)
  • Payroll Module
  • E-File Direct
  • Affordable Care Act Filer
  • 1042-S Filer
  • Software-Generated Forms
  • Forms Filer Plus

Software Solutions from AMS

Our W-2 and 1099 Forms Filer is our only required platform. From there, users pick the services they need. Choose from the tools below to build out your customized accounting software.