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Form 1099-NEC for a Foreign-Owned US LLC: Who Gets One in 2026

Your US LLC pays contractors. Do you file Form 1099-NEC? The four IRS conditions, the new $2,000 threshold, the deadline, and why a payment to a nonresident alien goes on Form 1042-S instead.

Written by Amel Ouchene, IRS PTIN holderLast updated Not legal or tax advice5 min read

Your US LLC pays freelancers or contractors. You live abroad, and you wonder whether the LLC has to file Form 1099-NEC. Being foreign-owned does not remove the question: the IRS asks about the payment, the payee and the purpose, not where the owner lives.

In short:

  • Four conditions. The IRS says a payment is generally reportable as nonemployee compensation if it is made to someone who is not your employee, for services in the course of your trade or business, to an individual, partnership, estate or, in some cases, a corporation, and the payee's total for the year reaches the threshold.
  • The threshold is $2,000 from 2026. The Instructions for Forms 1099-MISC and 1099-NEC (12/2026) say it rose to $2,000 for tax years beginning after 2025, and may be adjusted for inflation from 2027.
  • Deadline: January 31, on paper or electronically. January 31, 2027 is a Sunday, and the instructions say a date that falls on a weekend moves to the next business day, so February 1, 2027 for payments made in 2026.
  • A nonresident alien payee is different. The IRS says nonemployee compensation paid to nonresident aliens is reported on Form 1042-S, and Form 1042 must then be filed. Withholding may be required.

Who must file

The IRS page on reporting payments to independent contractors gives four conditions, and all four must be met:

  1. You paid someone who is not your employee.
  2. You paid for services in the course of your trade or business.
  3. You paid an individual, a partnership, an estate, or in some cases a corporation.
  4. You made payments to that payee that total the threshold or more during the year.

The instructions add that Form 1099-NEC applies only to payments made in the course of your trade or business: "Personal payments are not reportable." If the LLC has no trade or business and pays nobody for services, there is nothing to report. If it runs a business and pays contractors, check each payee against the four conditions.

The $2,000 threshold from 2026

The threshold used to be $600. The current instructions say the minimum threshold for reporting certain payments increased to $2,000 for tax years beginning after 2025. For nonemployee compensation, the box 1a instructions refer to fees or reimbursements totaling at least $2,000. Payments made in 2026 are therefore reported from $2,000 per payee. Check the threshold again each year: the IRS says it may be adjusted for inflation beginning in 2027.

Deadline

Section 6071(c) requires you to file Form 1099-NEC on or before January 31, on paper or electronically. If January 31 falls on a Saturday, Sunday or legal holiday, the due date is the next business day. For payments made in 2026, January 31, 2027 is a Sunday, so the due date is Monday, February 1, 2027.

Paper or electronic

  • Paper: Forms 1099-NEC filed on paper go with Form 1096, the annual summary. If you file more than one type of information return on paper, prepare a separate Form 1096 for each type. Form 1096 is not required for electronic filing.
  • Electronic: the IRS says employers who file 10 or more information returns (counting Form 1099 series, Form 1042-S and Form W-2 together) must file electronically. The IRS offers a free online option, the IRIS Taxpayer Portal.

Melya prepares your Forms 1099-NEC. We confirm in writing how they are submitted before starting, and we do not promise electronic filing.

Payees abroad: Form 1042-S, not 1099-NEC

The IRS page is explicit: "Nonemployee compensation paid to nonresident aliens is reported on Form 1042-S". If Form 1042-S is required, Form 1042 must also be filed, and withholding may be required on the payments. The IRS points to Publication 515 and Publication 901 for the rules and for tax treaties. This guide does not cover foreign payees in detail: whether and how much to withhold depends on the payee and the facts, so check it before you pay.

Collecting the payee's details

The IRS form for requesting a payee's taxpayer identification number (TIN) is Form W-9. Our W-8BEN or W-9 form finder shows which form applies to which payee. For your own LLC's paperwork when a platform asks for forms, see our guide to Form W-8BEN-E.

Your checklist

  • List every person or company the LLC paid in 2026 for services.
  • Mark who is an employee, who is a payee abroad, and who is an individual, partnership, estate or corporation.
  • Total the year's payments per payee and compare with $2,000.
  • Request Form W-9 from each US payee before reporting.
  • For payees who are nonresident aliens, check Form 1042-S and withholding before filing anything.
  • Put February 1, 2027 in your calendar for Forms 1099-NEC.
  • Count all information returns you file this year: 10 or more means electronic filing.

What Melya prepares

Form 1099-NEC (Assessment), $95: a written answer to "do you owe 1099s to your US contractors?". Form 1099-NEC (Preparation), $149: the forms for up to 5 payees, $15 for each additional one. Melya is a tax preparation business whose founder holds a PTIN. We do not represent you before the IRS and we do not give tax advice for your country of residence.

Frequently asked questions

Is a foreign-owned LLC exempt from Form 1099-NEC? No exemption is given for foreign ownership. The test is the four conditions above.

My contractor lives outside the United States. Do I file a 1099-NEC? Living abroad does not decide it on its own: the IRS rule turns on whether the payee is a nonresident alien. If the payee is a nonresident alien, the IRS says to use Form 1042-S, and Form 1042 is then required. Check the payee's status before choosing the form.

Is the threshold still $600? Not for tax years beginning after 2025. The current instructions say $2,000.

What is the deadline for payments made in 2026? January 31, 2027 falls on a Sunday, so the next business day applies: February 1, 2027.

Sources

Need this done? Form 1099-NEC (Assessment)Fixed price, quoted in writing before any work starts.
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This article is general information about US tax rules for foreign-owned LLCs, not advice for your specific situation. Rules change; check the date above and ask before you file.