Do You Need to Issue a 1099 for Software Subscriptions?

Surprisingly, the answer is no. New employers need to think about 1099 filings and which transactions require annual reporting. You must submit Form 1099 to report a number of non-employee compensations. Services performed may range from independent contractor pay to awards, prizes, and rents. There are exceptions for what employers must report and reporting software subscriptions makes the cut.


The Internal Revenue Services provides some Form 1099 exemptions. Aside from not reporting software subscriptions, below are other exceptions to make yourself aware of:


Corporations – Employers generally do not submit a 1099 form when they make payments to a corporation. The exception includes an LLC that is regarded similarly to a C or S corporation.


Services and Goods – Do not send a 1099 form for your merchandise, utilities, subscriptions, storage, and similar services.


Tax-Exempt Organizations – Many nonprofit organizations and trusts are exempt from taxes.


The IRS outlines the specific circumstances that require employers to send Form 1099. Despite not needing to issue a 1099 for software subscriptions, utilize software. Our W-2/1099 Forms Filer supports W-2, W-3, and many 1099 forms with an easy-to-use, menu-driven format. Call our customer support team at (405) 340-0697 or explore our free demo today.

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