We have a contractor who worked for us for 3 months(oct, nov, dec). Since his december 2011 pay check was lost in mail , we resent him another check in january 2012 (dated in january) although the payment was for december. When we file the 1099 misc, do we inlcude this payment for december although it was dated and cashed out in january or should it be for january 2012 (filed in next year 1099 misc)
asked 02 Feb '12, 14:08
You should use the constructive receipt rules to determine which period to report the payment in. When did you really give up control of the money so that he had actual use of it - 2011 or 2012.
I can't help but be curious when I see posts like yours. First you say you hired a contractor, then you talk about his Pay Check. Maybe I'm making the wrong assumption, but contractors don't get paychecks, employees do. Contractors get payments. Maybe I'm splitting hairs, but it helps to make sure we're all on the same page.
You only have to issue a 1099 IF you pay an unincorporated entity $600 or more for work they did for your TRADE OR BUSINESS. So first, you have to be in business to issue the 1099. Are we to assume you are in business? If so, remember you only have to issue the 1099 to an UNINCORPORATED entity - LLC, Partnership or Sole Proprietorship. You are not REQUIRED to issue a 1099 to a corporation - BUT we usually recommend that the be issued IF, and only if, other 1099s have to go out too.
answered 02 Feb '12, 14:28
The second check replaced the lost one, and the second check should be treated as a "non-event" as far as a deduction and 1099ing and all that is concerned. The "contractor" however, might claim that he didn't receive anything in the prior year. That's his problem, not yours.
If the original "paycheck" was mailed to him in December, that amount should be included in his 1099 for the prior year.
answered 03 Feb '12, 14:22
Henry B. 1