1099 Reporting for the Transportation Industry

Every January here at Schneider Downs, we receive many questions from our clients related to the requirement to send or receive the Form 1099-MISC. In general, any payment for services by a non-employee that is $600 or more should be reported on a Form 1099-MISC. Generally, the form is not required if the payments are made to a corporation (or a LLC that has elected to be treated as a S or C corporation) unless the payments are made to attorneys.

There are certain exceptions to the general rule, and one of the exceptions is very important to the transportation industry. Section 1.6041-3 ( c ) of the Income Tax Regulations exempt freight payments from 1099 information reporting. This exception applies to reporting of payments for truck, rail, ship and air freight services.

The follow-up question that we receive is how the Form W-9 should be completed since no Form 1099 reporting is required. The instructions to the Form W-9 do not address this situation. The exemptions that can be listed on the form apply solely to back-up withholding and FATCA (Foreign Account Tax Compliance Act) reporting. One option would be to complete the Form W-9, but to add the following statement to the top of the form: Exempt from Form 1099 Information Reporting by Reg. 1.6041-3 ( c ).

If you have questions on this or any other tax matters please contact us.

You’ve heard our thoughts… We’d like to hear yours

The Schneider Downs Our Thoughts On blog exists to create a dialogue on issues that are important to organizations and individuals. While we enjoy sharing our ideas and insights, we’re especially interested in what you may have to say. If you have a question or a comment about this article – or any article from the Our Thoughts On blog – we hope you’ll share it with us. After all, a dialogue is an exchange of ideas, and we’d like to hear from you. Email us at [email protected].

Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.

© 2021 Schneider Downs. All rights-reserved. All content on this site is property of Schneider Downs unless otherwise noted and should not be used without written permission.

our thoughts on
Tax Reform 2021 - Build Back Better: Excess Business Losses Further Limited than Under 2017 Tax Cut and Jobs Act
Tax, Tax Reform BY Kirk Mitchell
Tax Reform 2021 – Build Back Better: Proposed Changes to Increase Net Investment (NII) Income Tax on S Corporation Shareholders and Limited Partners
Tax, Tax Reform BY Kirk Mitchell
Tax Reform 2021 – Build Back Better: Surcharge on High Income Taxpayers and its Impact on Capital Gain Rate Taxes and Planning
Tax, Tax Reform BY Kirk Mitchell
Tax Reform 2021 – Build Back Better: Temporary Rule for S-Corporation Conversions to Partnerships
Proposed Legislation Targets Estate and Gift Tax Planning
Schneider Downs Trucking Industry White Paper Series
Register to receive our weekly newsletter with our most recent columns and insights.
Have a question? Ask us!

We’d love to hear from you. Drop us a note, and we’ll respond to you as quickly as possible.

Ask us
contact us

This site uses cookies to ensure that we give you the best user experience. Cookies assist in navigation, analyzing traffic and in our marketing efforts as described in our Privacy Policy.