Can I File a 1099 Form for Payments Made to a Foreign Person?

The general answer is no, but the question is technically open to more than one interpretation. A foreign independent contractor is not a 1099 worker in most circumstances. These international workers may provide specific talents at a more affordable price than hiring a full-time employee. Keep in mind that “1099” is the Internal Revenue Service’s code for U.S.-based contractors. The IRS does not expect or require businesses to withhold taxes or report income from their foreign contract workers. You should only file a 1099 form if:

  • The international contractor is a U.S. citizen operating outside of the country 
  • The contractor lives abroad but is a U.S. citizen who completed work in the U.S.

Make sure a foreign international contractor files IRS Form W-8 BEN. The form certifies their foreign status as a worker. Pay workers using common methods, such as an international wire transfer, paper check, international money order, or digital payment networks (e.g. PayPal).

Use our software to file 1099s and foreign workers’ U.S. source income documents. Download our free demo software today to discover how easy it is to align your tax forms.

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