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Are 1099s required for collection agencies?
August 29, 2024
Q. When we are required to garnish funds from an employees wages and remit to a collection agency, are the payments subject to 1099 reporting? In the past, we have had difficulties in getting certain collection agencies to supply a W-9. Previously, we were informed by the IRS that we needed to supply 1099s when the payee was a law firm.
A.
(Answered by IOFM's third-party tax experts)
If the garnishment payment is payable to a private creditor or debt collection company, and not an attorney, the…
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