TheTax and Regulatory Compliancetopic in the APS Certification Program covers IRS Form 1099 reporting requirements for payments to U.S. unincorporated service providers (e.g., independent contractors, freelancers). Payments for services totaling$600 or morein a calendar year must be reported on Form 1099-NEC (Nonemployee Compensation), ensuring the IRS can track income for tax purposes.
Option A ($600): Correct. The IRS requires Form 1099-NEC for payments of $600 or more to unincorporated U.S. service providers, such as individuals or partnerships, for services rendered.
Option B ($1,000): Incorrect. The $600 threshold applies, not $1,000.
Option C ($500): Incorrect. The threshold is $600, not $500.
Option D ($300): Incorrect. The threshold is $600, not $300.
Reference to IOFM APS Documents: The APS e-textbook underTax and Regulatory Compliancestates, “Payments of $600 or more to U.S. unincorporated service providers must be reported on Form 1099-NEC, per IRS regulations.” TheMaster Guide to Form 1099 Compliancespecifies, “The $600 threshold applies to nonemployee compensation paid to individuals, sole proprietors, or partnerships, requiring a 1099-NEC filing.” The training video reinforces this, noting, “AP ensures 1099-NEC forms are issued for payments of $600 or more to track contractor income.”
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