What is included in “medical and healthcare payments” to be reported in Box 6 of Form 1099-MISC?

Medical and health care payments include payments of $600 or more to each physician or other supplier or provider of medical or health care services.   Payments to persons providing health care services often include charges for injections, drugs, dentures, and similar items.  However, you are not required to report payments to pharmacies for prescription drugs.  Also, payments for insurance premiums is not included as a premium is not considered a “service.”  You are paying for insurance that may or may not be used.    However, if you are a medical and health care insurance company, payments made under health, accident, and sickness insurance programs are reportable.  If payment is made to a corporation, list the corporation as the recipient rather than the individual providing the services.

The exemption from issuing Form 1099-MISC to a corporation does not apply to payments for medical or healthcare services provided by corporations, including professional corporations.  If payment is made to a corporation, list the corporation as the recipient rather than the individual providing the services.  However, you are not required to report payments made to a tax-exempt hospital or extended care facility or to a hospital or extended care facility owned and operated by the United States (or its possessions), a state, the District of Columbia, or any of their political subdivisions, agencies or instrumentalities.

When is backup withholding required?

  • You make reportable payments to persons (or corporations) who have not furnished their valid TIN.
  • The IRS notifies you to impose backup withholding.
  • In certain cases, with interest, dividend and broker and barter exchange accounts when the payee does not certify the TIN is correct or that they are not subject to withholding. The withholding rate is 24%. For most companies, if you receive a completed and signed W-9 backup withholding will not apply.

Is a payee an exempt corporation if it uses the term “Company” or “Co.” in its name?

A payer cannot treat a payee as an exempt organization merely because the business name contains the word “Company” or “Co.” A payer may treat a payee as exempt if:

  • the name contains the term insurance company, indemnity company, reinsurance company or assurance company. Requirement one is also met if the entities name indicates that it is an entity listed as a corporation under IRS Regulations, section 301.7701-2(b)(8)(i),
  • the payer has on file a corporate resolution or similar document clearly indicating corporate status,
  • the payer receives a Form W-9 which includes an EIN and a statement from the payee that it is a domestic corporation or,
  • the payer receives a withholding certificate described in Section 1.1441-1(e) (2)(i), that includes a certification that the person whose name is on the certificate is a foreign corporation.

For additional information see Publication 1281, Backup Withholding.

Are payments made to a corporation reportable on a 1099-MISC and 1099-NEC form?

Generally, payments to a corporation (including a limited liability company (LLC) that is treated as a C or S corporation) are not reportable.  However, the following payments made to corporations generally must be reported on Form 1099-MISC.

    • Medical and health care payments reported in box 6, 1099-MISC.
    • Fish purchases for cash reported in box 1, 1099-NEC.
    • Attorneys’ fees reported in box 1, 1099-NEC.
    • Gross proceeds paid to an attorney reported in box 10, 1099-MISC.
    • Substitute payments in lieu of dividends or tax-exempt interest reported in box 8, 1099-MISC.
    • Payments by a federal executive agency for services (vendors) reported in box 1, 1099-NEC.

For additional information see the Instructions for Forms 1099-MISC and 1099-NEC.