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1099 reporting when a factor is used
October 12, 2022
Q. One of our vendors just sent us a copy of a contract they now have with a bank that assigns all their present and future accounts to be payable to the bank directly and not the vendor themselves. They are providing services to us. Who would receive Form 1099 NEC?
A.
(Answered by IOFM's third-party tax experts)
The vendor is the "Recipient" that is reported to the IRS on Form 1099-NEC. The situation you described is generally referred to as a factor assignment, which is a lending…
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