What is the 1099-MISC form used for?

Businesses file Form 1099-MISC, Miscellaneous Income for each person (who’s not an employee) and unincorporated business (with some exceptions) in the course of your business to whom you have paid during the year:

    • At least $10 in royalties (see the instructions for box 2) or broker payments in lieu of dividends or tax-exempt interest (see the instructions for box 8);
    • At least $600 in:
    1. Rents (box 1);
    2. Prizes and awards (boxes 3);
    3. Other income payments (box 3);
    4. Generally, the cash paid from a notional principal contract to an individual, partnership, or estate (box 3);
    5. Any fishing boat proceeds (box 5);
    6. Medical and health care payments (box 6);
    7. Crop insurance proceeds (box 9);
    8. Payments to an attorney (box 10) (see Payments to attorneys, in 1099 instructions);
    9. Section 409A deferrals (box 12); or
    10. Nonqualified deferred compensation (box 14).

In addition, use Form 1099-MISC to report that you made direct sales of at least $5,000 of consumer products to a buyer for resale anywhere other than a permanent retail establishment (box 7).

You also must file Form 1099-MISC for each person from whom you have withheld any federal income tax (report in box 4) under the backup withholding rules regardless of the amount of the payment.

For additional information see the Instructions for Form 1099-MISC 

What royalty payments are reportable on a 1099-MISC form?

Report gross royalty payments (or similar amounts) of $10 or more. Report royalties from oil, gas, or other mineral properties before reduction for severance and other taxes that may have been withheld and paid. Do not include surface royalties. They should be reported in box 1. Do not report oil or gas payments for a working interest in box 2; report payments for working interests in box 7. Do not report timber royalties made under a pay-as-cut contract; report these timber royalties on Form 1099-S, Proceeds from Real Estate Transactions.

Use box 2 to report royalty payments from intangible property such as patents, copyrights, trade names, and trademarks. Report the gross royalties (before reduction for fees, commissions, or expenses) paid by a publisher directly to an author or literary agent, unless the agent is a corporation. The literary agent (whether or not a corporation) that receives the royalty payment on behalf of the author must report the gross amount of royalty payments to the author on Form 1099-MISC whether or not the publisher reported the payment to the agent on its Form 1099-MISC.

For additional information see the 2019 Instructions for Form 1099-MISC