Written by: Adams Tax Services
Confused about fixing mistakes on your 1099 forms? We’ve got tips for sending a 1099 correction to the IRS when common errors happen.
As a preliminary step, you’ll want to check the type of error that occurred on your 1099. While the IRS technically identifies 2 types of error, Adams Tax Services has broken them down into 3 types for clarity. Below are the 3 types of 1099 errors that can happen, so you’ll need to determine which one applies to you.
The IRS asks for different corrective actions based on the type of error made, and you can always find detailed instructions at the IRS website. But here are the basics.
The 3 types of errors
Type 1: Incorrect money amount, code, or checkbox, or you filed an unnecessary form.
Type 2: Wrong payee/recipient information (name or taxpayer identification number (TIN)) or you used the wrong form (e.g. you filed a 1099-MISC when you should have filed a 1099-NEC).
Type 3 (Payer Information): Incorrect Payer Name, Payer TIN, or both Correct a Type 1 Error For Type 1 errors, are cases where the amount of money is wrong, you entered an incorrect code or you checked the wrong box.
Action: To correct Type 1 errors, file the correct form with the correct amount, code, checkbox, name or address, and check the “CORRECTED” box. This overwrites what you originally filed with the IRS under that person or company’s name and TIN. Send the corrected form to the recipient and prepare the red Copy A to send to the IRS with the Form 1096 transmittal if you’re paper filing. If you also had the wrong recipient/payee name or TIN do a Type 2 correction instead.
Correct a Type 2 Error
For Type 2 errors, either the recipient/payee name and/or the TIN are wrong or you used the wrong form (like a 1099-MISC instead of a 1099-NEC). Action: This is a two-step process. First, you must zero out what you filed with the IRS under the wrong name/TIN and then file the new form.
Step 1: File a form with the CORRECTED box checked and the exact same payer and recipient information as on the incorrect form, but with all the amounts as zeros. This will remove the originally filed form from the IRS records.
Step 2: File a new Form 1099 with the right information as an originally filed form (not a corrected form).
Type 3 Error: Incorrect Payer Name, Payer TIN, or both Action: Write a letter to the IRS. If you filed with the wrong payer name (yours or your client’s name/company name) or the wrong payer taxpayer identification number (TIN), you don’t need to send in a corrected form. Instead, you should write a letter containing the following information:
Name and address of the payer
Type of error (including the incorrect payer name/TIN that was reported)
Tax year Payer TIN Transmitter Control Code (if you eFiled), Type of return, Number of payees, Filing method (paper or electronic)
Was federal income tax withheld? Send your letter to:
Internal Revenue Service Information
Returns Branch 230 Murall Drive, Mail Stop 4360
Kearneysville, WV 25430
You should expect to hear back from the IRS within 30 days, but sometimes a response takes longer. You should receive an acknowledgement notice confirming the IRS received your letter. If any additional info is needed, an IRS employee will contact you.
What if I filed a form with the wrong address?
If the address of the payer or payee/recipient is incorrect, you don’t need to file a corrected return with the IRS. The IRS does not use the address to process returns. Make sure your recipient received their copy if it was mailed to an incorrect address. And here’s a secret: you won’t always need to file a corrected return. But if you do, Adams® Tax Forms Helper® Online makes it easy to create a corrected 1099 form for federal agencies. So don’t fret. Just click on “CORRECT A FORM” and follow the onscreen instructions.
Correcting a 1099 form has never been simpler. We hope you find this information useful. As always, Adams Tax Services is happy to help. Because taxes shouldn’t be taxing.