Understanding 1099 Statuses

Diagram showing filing statuses and lifecycle

Status	Description
Action required	Action is required by the payer due to missing or mismatched criteria. The 1099 form moves to this status if any of the "Action Required Criteria" is not met.
Ready	The 1099 form is ready for submission, having met all "Eligibility Criteria".
Submitted	The 1099 form has been sent to the IRS but hasn’t been accepted yet.
Accepted	The IRS has confirmed receipt and acceptance of the 1099 form or its correction.
Rejected	The IRS has rejected the 1099 submission.
Excluded	The tax form won't be filed due to reasons specified in the "Eligibility Criteria"

2. Eligibility Criteria:

Minimum Amount: The contractor should have received at least $600 from a single payer during the tax year.
Eligible Tax Classification: Payments to C Corps, S Corps, and LLCs that are taxed as corporations do not require a 1099-NEC form. The exception is for legal services, which you will need to handle manually.
U.S. Business or Individual: Contractor should be a U.S. citizen or resident alien or a domestic business entity, including partnerships and LLCs. Non-U.S. entities aren't eligible and may need different tax forms.

3. Action Required Criteria:

Mandatory Information:
- Contractor Address: Where the 1099 should be sent.
- Contractor TIN (Tax Identification Number): Can either be an SSN (Social Security Number) or an EIN (Employer Identification Number).
- Contractor Name: Must be the legal business name for companies or the legal first and last name for individuals.
Recommended Criteria:
- Matched TIN: The TIN should be confirmed by the IRS to match the given name. It should not be pending or mismatched. You should re-enter a correct TIN and name.
- Federal Tax Classification: The tax status of the contractor. If no tax classification is provided, we default to Sole Prop.

4. Status Workflow:

When a 1099 form is generated (amounts and status are calculated), if the form meets all "Eligibility Criteria", it progresses to the Ready status. If not, it moves to Excluded.
- If any "Action Required Criteria" is missing, it will be marked Action Required.
- If all criteria is fulfilled, it returns to Ready.
The form can then be Submitted to the IRS.
The IRS will either Accept or Reject the form.
- If accepted, the process ends.
- If rejected, it reverts to Action Required for corrections.

Eligible individuals include U.S. citizens, resident aliens with a substantial presence, or those with a Green Card. Non-U.S. entities aren't eligible and may require other forms which are not supported by Wingspan.