1099-NEC for rental property repairs

Forum|Forum|2 years ago
November 8, 2023
2 replies
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I need to replace the water heater in my rental property which will cost more than $600. I am not sure how I am going to issue the 1099-NEC form. If it is a local plumber, I don't feel comfortable asking for their social sec number. If it is a corporate, do I need to check their tax status? Also, does it make a difference paying with cash vs check/credit card. Basically, trying to find out how to do this repair without having to file 1099-NEC. Thanks.

Best answer by DoninGA

If you are the landlord and are not in the business of property rentals you are not required to issue a Form 1099-NEC to any independent contractor or a service company employee who performs a service on the rental property.

DoninGAAnswer

Employee

Carl11_2

Employee

What @DoninGA said is correct. However, you can issue one if you desire. Sometimes folks elect to issue the 1099-NEC to unincorporated contractors as a way of supporting their claim to the QBI deduction. It's really not necessary though.

AmeliesUncle

@Vic14 wrote:
If it is a local plumber, I don't feel comfortable asking for their social sec number. If it is a corporate, do I need to check their tax status?

Also, does it make a difference paying with cash vs check/credit card.

If your rental DOES rise to the level of a trade or business, then ...

You give the plumber a W-9 to fill out. They could use their EIN instead of their Social Security Number. Or they may check the box that they are a corporation, so no 1099-NEC would be required.

https://www.irs.gov/pub/irs-pdf/fw9.pdf

Yes, if you pay by credit card, you would not need to issue a 1099-NEC because the credit card payments fall under different rules (the credit card merchant may issue the plumber a 1099-K).