It is highly unlikely that you will go through 1099 filing season and not come across one required correction, but correcting forms is easy once you understand the process.
Hoping to catch your mistakes early?
We’ve compiled a list of the top 10 1099 filing mistakes you need to care about.
Types of 1099 Errors
There are two types of 1099 errors to be corrected. Type 1 only requires one Form 1099 to be filed to correct the error. Type 2 will require two 1099 forms to be filed to make the correction.
Type 1 Errors
Type 1 errors occur when you prepare a form with:
To correct Type 1 errors, file the correct form with the correct amount, code, checkbox, name or address and check the “CORRECTED” box (generally located at the top of the form). Send the corrected form to the recipient and prepare the red Copy A to send to the IRS with the Form 1096 transmittal if paper filing. For electronic filing, you do not need to send in a Form 1096, nor should you send in the originally filed forms with the correction to the IRS.
Type 2 Errors
Type 2 errors occur when you prepare a form with:
To correct Type 2 errors, you will need to file two form 1099s:
Other Items to Note in 1099 Corrections
If the recipient of the form has different information in their records, they will likely contact you for an explanation or correction of the 1099 Form. Occasionally, this difference in records is due to a check being written and deposited, or something similar.
An IRS notice is the other main reason to amend a form. This generally relates to a TIN that doesn’t match what the IRS has for the recipient name.
Just remember—when correcting forms, be sure to verify the type of error, so you know if you need to prepare one 1099 or two to complete the correction.
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