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Reporting a lump sum payment to subcontractors' employees
August 29, 2024
Q. We are a general contractor in the middle of a legal dispute where a second-tier subcontractor of ours did not pay prevailing wage to its employees. We as the general contractor have been instructed to pay a lump sum directly to the subcontractors' employees. Will we need to issue 1099s for these payments made directly to the subcontractor's employees? or Does the subcontractor need to include the lump sum payments in his W-2s?
A.
(Answered by IOFM's third-party tax experts)
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