Does an HOA have to send 1099s to its vendors?

By OurHOA · General information · Revised September 22, 2026

When an HOA must issue Form 1099-NEC to a landscaper, handyman or attorney, the $2,000 threshold that replaced $600 for 2026 payments, W-9s, and who files.

Yes, and the association is the payer even when someone else writes the check

Boards often assume information reporting is a business problem and that a nonprofit community association sits outside it. It does not. Internal Revenue Code section 6041 requires anyone making reportable payments in the course of a trade or business to file an information return and furnish a copy to the person paid, and the regulation under it reaches nonprofit organizations. An association that files Form 1120-H or Form 1120 every year, hires contractors, pays an attorney and carries insurance is running exactly the kind of activity the section describes. Being organized as a nonprofit corporation under state law settles nothing here, for the same reason it settles nothing about the annual return. Our guide on whether an HOA has to file a tax return or pay taxes covers that distinction in full. One practical wrinkle: if a management company pays vendors out of the association's operating account as its agent, those are still reportable payments by the association, and who actually transmits the filings is a question your management agreement should answer in writing. If the agreement is silent, ask before December, because nobody wants to discover in February that each side assumed the other filed.

The threshold moved, and $600 is now the wrong number

For decades the trigger was $600 in a calendar year, and most board handbooks, vendor checklists and bookkeeping templates still say so. Section 70433 of the legislation enacted on July 4, 2025 amended section 6041(a) and raised the reporting threshold from $600 to $2,000 for payments made after December 31, 2025. So for the 2026 payment year, the year most boards are budgeting and paying through right now, a vendor you paid $1,400 falls below the line and a vendor you paid $2,100 does not. The threshold is indexed for inflation beginning in 2027, using 2025 as the base year, which means the number will drift upward and a board that memorizes a figure will be wrong again in a few years. Check the current instructions each January instead of trusting last year's checklist. The change also did not touch every reporting rule. Gross proceeds paid to an attorney are reported under a separate provision, section 6045(f), and the IRS instructions still set that box at $600 or more.

Which payments count, and the corporation exception that catches boards out

Reportable payments are for services, not goods. The landscaping contract, the pool service, the handyman, the snow removal contractor, the roof consultant, the reserve study preparer and the bookkeeper are all service payments. Pallets of mulch bought from a supply yard are not. Service payments go in box 1 of Form 1099-NEC. Rent is different and belongs on Form 1099-MISC, which matters to associations that lease an office, a storage unit or equipment. Now the part that produces the most mistakes: payments to a corporation, including an LLC that has elected to be taxed as a C or S corporation, are generally exempt from reporting. Many boards stop there and file nothing for any vendor with Inc. or LLC in its name. That is wrong twice over. An LLC is not automatically a corporation, and a single-member LLC taxed as a disregarded entity is reportable. And the corporate exemption does not apply to legal services at all, so attorneys' fees are reportable even when the firm is incorporated. Association counsel is one of the payees a board is most likely to miss and least able to afford missing.

Collect the W-9 before the first check, not in January

Every determination above turns on facts you cannot see from a check: the vendor's legal name, its taxpayer identification number and its federal tax classification. Form W-9 is how you get them, and the only reliable time to ask is before you pay the vendor anything, while you still have leverage. Chasing a TIN in January from a handyman who worked two jobs in March is a well known way to lose a week. There is a real consequence for going without one, too. Under section 3406, a payer who does not have a correct TIN must apply backup withholding at 24 percent to reportable payments, meaning the association is supposed to hold back a quarter of the vendor's check and remit it to the IRS. Almost no volunteer board is set up to do that, which is precisely why the W-9 belongs in the same folder as the certificate of insurance and gets collected at the same moment. Making both a condition of the first payment is a small policy change that fits naturally alongside a board's contracting and bidding procedures.

Deadlines, electronic filing, and what happens if you skip it

Form 1099-NEC is due on or before January 31, to the recipient and to the IRS, under section 6071(c). There is no separate later date for the government copy, which surprises people used to the older schedule. Form 1099-MISC has its own dates that differ by box and by whether you file on paper or electronically, so read the current instructions rather than assuming they match. The requirement most likely to catch a small association by surprise is electronic filing. Treasury Decision 9972 lowered the electronic filing threshold to 10 returns, counted by aggregating all information returns of all types, effective for returns required to be filed on or after January 1, 2024. An association with eight 1099s, a W-2 for a part time gate attendant and a couple of other filings is over the line and cannot mail paper. Failing to file correct returns and failing to furnish payee statements carry separate penalties under sections 6721 and 6722, assessed per return, scaled by how late the filing is and increased substantially where the failure is due to intentional disregard. Those amounts are adjusted for inflation each year, so look up the current figures rather than repeating one you heard.

What to do before the year closes

Pull the check register and the credit card statements for the year and list every person or company paid for services, sorted by total. Match each one against your W-9 file and flag the gaps now, while the vendor still wants your next contract. Decide in writing who transmits the filings, the association or the manager, and put that in the management agreement rather than in an email thread. Watch for the one category a 1099 cannot fix: if the person is really an employee, the on-site manager, the maintenance worker, the pool attendant paid in cash every Friday, the correct form is a W-2 and the association has payroll, withholding and workers' compensation obligations that no 1099 discharges. Misclassifying an employee as a contractor costs far more than missing a form. Finally, hand the completed vendor list to a CPA who works with community associations in the first week of January, not the last. These rules are federal but they change with some regularity, and the thresholds above moved recently, so confirm the current year's figures before filing.

Sources

These guides are general education for HOA boards and residents, not legal, tax, or financial advice. Rules vary by state and by your community's governing documents - check with a professional for your situation.

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