Get a signed W-9 before you write the first check to any new company, because almost every 1099 headache traces back to not having one. Most associations are treated as a business for tax purposes, so when they pay an independent contractor for services they can be on the hook to issue Form 1099-NEC at year-end, with a penalty per form for missing it. January arrives on the same date every year. The scramble is the avoidable part.
Here is a checklist for boards and community managers. (General information, not tax advice: the rules changed recently and they vary by situation, so confirm the specifics with your association's CPA.)
What a 1099-NEC is for
Form 1099-NEC ("Nonemployee Compensation") reports payments your association made to independent contractors for services during the year. If you paid a landscaper, a pool company, a porter service, a handyman, or an attorney, those payments may need to be reported to the IRS on a 1099-NEC, with a copy to the company.
It applies to independent contractors, which is the IRS's own term for the companies most associations hire. Employees get a W-2 instead, and purchases of goods generally need no form at all.
The threshold rose from $600 to $2,000
For years the statutory threshold in Internal Revenue Code §6041 was $600: pay a qualifying company that much or more in a calendar year and you issue a 1099-NEC.
That figure changed. The federal budget reconciliation act signed in July 2025 (Public Law 119-21) raised the 1099-NEC and 1099-MISC reporting threshold from $600 to $2,000, effective for payments made after December 31, 2025, and indexed it for inflation in later years. Both are statutory figures, set by the law rather than estimated by anyone. The effective date decides which one you use:
- Payments made in 2025, reported in early 2026: the $600 threshold.
- Payments made in 2026, reported in early 2027: the $2,000 threshold.
This is a recent change, the inflation indexing moves the number again in future years, and state reporting rules do not always follow the federal one. Confirm the figure that applies to your filing year, and your state's own requirement, with your association's CPA before you decide a company does not need a form. Getting it wrong in either direction is avoidable. That means filing when you did not have to, and skipping a form you did need.
Who does NOT get a 1099
A few important exceptions save you work:
- Corporations. Payments to companies organized as C-corporations or S-corporations generally do not require a 1099-NEC. The big exception: attorneys get a 1099 even if they are incorporated.
- Payments made by credit card or third-party networks. If you paid by credit card, debit card, or a third-party payment platform, the card processor reports that payment on a 1099-K. You should not also report it on a 1099-NEC. This trips up a lot of associations. Only report what you paid by cash or check.
- Employees. Anyone on payroll gets a W-2, not a 1099.
The company's W-9 (below) tells you how it is organized, so you know which of these applies.
The single most important habit: collect the W-9 up front
Nearly every 1099 headache traces back to one thing. Not having the company's W-9. Form W-9 gives you their legal name, address, taxpayer identification number (EIN or SSN), and entity type. That covers every field the 1099 asks for.
Make it a hard rule. Get a signed W-9 before you issue the first payment to any new company. Chasing a W-9 in January is miserable and sometimes impossible. The work is done by then and the company has no reason to hurry. Collecting it at signup takes thirty seconds and saves the whole scramble.
If a company refuses to provide a W-9, the IRS rules allow, and may require, backup withholding on its payments. Loop in your CPA if that ever comes up.
The deadlines
For each applicable filing year, the key date is the same:
- January 31. 1099-NEC forms must be furnished to the companies and recorded with the IRS.
That is an early, company deadline, which is exactly why the W-9 needs to already be in hand. If you are filing ten or more information returns, the IRS generally requires electronic filing, so factor that in.
A clean year-end checklist
Run this every December so January is boring:
- Pull the payment totals for the calendar year, split by payment method. Only cash and check payments count toward a 1099-NEC. Card payments are excluded.
- List every company at or above the applicable threshold for that filing year.
- Match each one to a W-9. Missing one? Request it now, not in late January.
- Drop out the exceptions. Corporations, except attorneys, and anyone you paid by card.
- Prepare and send the 1099-NECs to the companies and the IRS by January 31.
- Keep copies and the W-9s on file with your association records.
Where good records make this trivial
The reason 1099 season is painful is almost never the tax rule. It is scattered records. Payments split between checks and cards, two companies whose W-9s were never collected, and no single place showing what each one was paid.
The W-9 is the clearest case. On VendoRFP a company files its W-9 when it signs up, and a person here verifies it in the same review. That is the January scramble removed at the source. The form is on file before the work starts, instead of being chased after the last check has cleared.
The totals come together the same way. Each company issues its own invoice. All of them land in one place in your community's records, and you pay each one there. So a year of payments to a given company is already a list, not something you rebuild from bank statements. Sales tax and payment processing sit as their own line items, which is exactly the split you want when you are separating what you paid for the work from what you paid in tax and fees.
Year-end reporting is a records problem, and January is a bad month to discover it. VendoRFP is where the records already are. Local vendors propose on the work you posted, and your board picks from proposals it can read against each other. The agreement runs between your community and the vendor it chose. The gate is three documents: general liability, workers' compensation, and the credential the vendor's own trade requires. Somebody here opens the certificate and verifies it against your community's limits. Every vendor invoices you in its own name, and the invoices land in one place with the visit records beside them — which is the same place you will read them from in January.
Even if you handle all of this in a spreadsheet, the lesson holds. Collect the W-9 before the first check, track payments by method, watch the threshold that applies to your filing year, and hit January 31. Run it in that order and 1099 season stops being a fire drill and becomes a fifteen-minute task.