If you need to file a 1099 for a deceased individual or a business that closed mid-year, you are still required to report payments made before their passing or closure. Here’s how to handle each situation:
1. Filing a 1099 for a Deceased Person
If you made payments to an individual who later passed away, you must still issue a Form 1099-MISC or 1099-NEC if they meet the reporting threshold.
Steps to File:
- Use the deceased individual’s name and Taxpayer Identification Number (TIN) (Social Security Number or EIN) on the 1099 form.
- Send a copy to the estate or beneficiary who is managing the deceased person’s finances.
- If payments were made after death, issue the 1099 to the estate instead.
- Use the estate’s EIN instead of the deceased person’s SSN.
- The executor or personal representative should provide the EIN.
- File the form as usual with the IRS and provide copies to the estate or heirs.
2. Filing a 1099 for a Business That Closed Mid-Year
If a business ceased operations during the year, you must still report payments made before closure.
Steps to File:
- Use the business’s legal name and EIN as they were before closure.
- Issue the 1099 to the business if payments were made before it closed.
- If the business was a sole proprietorship and the owner passed away:
- Issue the 1099 in the owner’s name and SSN if the payments were before death.
- Issue it to the estate (EIN) if payments were made afterward.
- File as usual before the 1099 deadline.
