1099 Contractor Compliance Checklist

Avoid misclassification penalties and year-end filing headaches.

Join the Tools Club — $7/mo Already a Member? Log In

Included in the $7/mo Tools Club · Printable PDF checklist

Before You Pay a Contractor

Collect a completed Form W-9 before the first payment
Confirm the worker is properly classified (not really an employee)
Put the scope and payment terms in a written agreement

During the Year

Track total payments per contractor
Keep W-9s on file for at least 4 years
Flag any contractor approaching $600 in total payments

Year-End Filing

Issue Form 1099-NEC to every contractor paid $600+
File 1099s with the IRS by the January deadline
Send state copies if your state requires them

Red Flags to Review

Contractor works set hours you control
Contractor uses only your equipment and tools
Contractor has worked exclusively for you for over a year

See the full checklist

Join the Tools Club to unlock every item, or download the printable PDF.

Join the Tools Club — $7/mo

Frequently Asked Questions

What's the penalty for missing the 1099 filing deadline?

Penalties scale with how late the filing is, ranging from tens to hundreds of dollars per form, and increase further if the IRS deems it intentional. Filing on time, even if incomplete, is usually better than not filing.

Do I need a W-9 if I paid a contractor under $600?

Collecting it upfront regardless of amount is the safer habit, since you often don't know at the start of a relationship whether total payments will cross $600 by year-end.

What actually makes someone an employee instead of a contractor?

Behavioral and financial control matter most: do you set their hours, direct how the work gets done, and provide the tools? The more control you exercise, the more likely they're legally an employee.

Is there a Canadian version of this checklist?

Yes — see the T4A Contractor Compliance Checklist (Canada), which covers CRA's T4A slip requirements instead of the US 1099-NEC.

Related Resources

Want the Full Template Library?

100+ editable templates, each with a built-in AI prompt. $7/month during prelaunch, locked in for life.

Join the Tools Club