1099-NEC Requirements for Foreign Contractors

 

As a virtual accountant for creative business owners, I see a lot of really impressive remote employer/contractor relationships. 

As my clients continue to grow their business, they often time seek virtual assistants and other talented contractors abroad.  One question that always comes up around tax time is “Do I have to prepare a 1099-NEC for a foreign contractor?“.

Do I have to prepare a 1099-NEC for a foreign contractor?

If the foreign contractor is not a U.S. taxpayer, and all of the contracted services were performed outside the U.S., a Form 1099 is not required. Instead, you will need to ask the contractor to complete a Form W-8BEN

The Form W-8BEN certifies that the foreign contractor is not a U.S. taxpayer.  The Form W-8BEN is never submitted to the IRS, however, it needs to be held in your files in case of an audit.  If you are audited by the IRS, the Form W-8BEN will support your reasoning for not issuing a 1099.

Tracking Fringe Benefits as an S-Corporation Owner: A Comprehensive Guide

What Is the Alternative Minimum Tax (AMT)?

 
Amy Northard, CPA

Amy Northard, CPA

Founder of The Accountant for Creatives®
+ taxes + bookkeeping + consulting
+ Hang out with me over on Instagram!

One Comment

Are things like taxes & bookkeeping getting in the way of your creative time? Let's Chat!
Bookkeeping & Tax Tips
Sign up for free tax tips and advice sent straight to your inbox!
By clicking on the submit button, you agree with our Privacy and Terms Policy.