Some examples of payments that are exempt from 1099 reporting are:
- Payments for only merchandise such as office supplies, cleaning supplies, and products purchased for resale.
- Payments for telegrams, telephone, freight, and storage.
- Payments of rent to real estate agents acting as an agent for the owner.
- Payments to tax-exempt entities under IRC § 501(a) such as governments, the United States, states, District of Columbia, a possession of the United States or any political subdivision, agency or instrumentality of any of these.
- Wages paid to employees. All employee compensation, cash or noncash, must be reported on Form W-2.