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What payments are exempt from 1099 reporting?

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.