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December 23, 2023
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1099 to a Foreign Contractor

  • December 23, 2023
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Do You Have to Send Form 1099 to a Foreign Contractor?

Hi, I was not able to find on the IRS site the proof of this statement related to foreign contractors and I was wondering if Form 1099 has to be sent to a foreign contractor performing their services outside of the US:

 

You will have to issue Form 1099 to an independent contractor if you have paid them at least $600 in a single year AND either of the following is true: 

  • The independent contractor is considered a US person 
  • The independent contractor is not a US person but performed at least part of their services within the US. 

Conversely, if the independent contractor is not a US person and did not perform any of their services within the US, you will not be required to issue Form 1099. Instead, the foreign contractor will have to complete and file Form W-8BEN. 

 

this extract was taken from this website:

https://www.greenbacktaxservices.com/knowledge-center/1099s-foreign-contractors/#:~:text=Conversely%2C%20if%20the%20independent%20contractor,and%20file%20Form%20W%2D8BEN.

Best answer by Jelayca V

Hello there, 

 

I understand that you might be wondering if you need to send Form 1099 to a foreign contractor who is performing their services outside of the US. Here's what you need to know: 

 

According to the IRS and other sources, you do not need to send Form 1099 to a foreign contractor who is not a US person and is providing their services outside of the US. Instead, the foreign contractor will have to fill out and file Form W-8BEN, which certifies that they are not a US taxpayer. 

 

Form W-8BEN is used by the IRS to keep track of the income generated by non-US citizens and foreign businesses when contracting with American companies. Although this form is not submitted to the IRS, you need to keep it on file in case of an audit. 

 

If the foreign contractor cannot prove exemption from withholding, your organization is required to withhold 30% of all income generated to be paid later as tax. Therefore, it's crucial to ensure that the required forms are collected and filed according to the IRS guidelines.

 

You can refer to this Form W-8 BEN to check for the qualifications: https://www.irs.gov/pub/irs-pdf/fw8ben.pdf

 

If you need more information about 1099 form and things to know when preparing your form 1099, you may refer to this article:

 

 

Please feel free to reach out to me if you have any other concerns regarding 1099 form in QuickBooks. I'd be more than happy to assist you. Have a great day. 

1 reply

J
Jelayca VAnswer
December 23, 2023

Hello there, 

 

I understand that you might be wondering if you need to send Form 1099 to a foreign contractor who is performing their services outside of the US. Here's what you need to know: 

 

According to the IRS and other sources, you do not need to send Form 1099 to a foreign contractor who is not a US person and is providing their services outside of the US. Instead, the foreign contractor will have to fill out and file Form W-8BEN, which certifies that they are not a US taxpayer. 

 

Form W-8BEN is used by the IRS to keep track of the income generated by non-US citizens and foreign businesses when contracting with American companies. Although this form is not submitted to the IRS, you need to keep it on file in case of an audit. 

 

If the foreign contractor cannot prove exemption from withholding, your organization is required to withhold 30% of all income generated to be paid later as tax. Therefore, it's crucial to ensure that the required forms are collected and filed according to the IRS guidelines.

 

You can refer to this Form W-8 BEN to check for the qualifications: https://www.irs.gov/pub/irs-pdf/fw8ben.pdf

 

If you need more information about 1099 form and things to know when preparing your form 1099, you may refer to this article:

 

 

Please feel free to reach out to me if you have any other concerns regarding 1099 form in QuickBooks. I'd be more than happy to assist you. Have a great day. 

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