Quick answer: yes. A homeowners association must issue Form 1099-NEC to unincorporated vendors it pays for services above the reporting threshold — the landscaper, the handyman, the self-employed community manager — and the Form 1120-H election does not exempt you. The part most boards have wrong in 2026: the threshold changed. Payments made during 2025 (the forms you filed in early 2026) still use the old $600 floor. Payments made during 2026 and later use a new $2,000 floor under the One Big Beautiful Bill Act, signed in July 2025. Forms are due January 31, corporations are generally exempt (attorneys excepted), and the fix for every 1099 headache is the same: collect a W-9 before the first check goes out.
Yes, Your HOA Is a Business for 1099 Purposes
The confusion starts with the word "nonprofit." Boards reason that because the association is a nonprofit corporation under state law, or because it files the special HOA return on Form 1120-H, the business-world paperwork doesn't apply. That reasoning fails on both counts.
Information reporting — the 1099 system — applies to any entity making payments in the course of a trade or business, and the IRS treats associations as businesses for this purpose. Your HOA collects assessments, hires vendors, and pays for services; that is enough. The 1120-H election changes how the association's income is taxed. It says nothing about the association's obligation to report what it paid other people. An HOA that owes zero income tax can still owe 1099 filings on every unincorporated vendor it used all year.
This is also one of the first things a CPA checks during a financial audit or review: were 1099s filed, and do they tie to the vendor payments in the ledger? Missing forms are a classic finding in first-year audits of self-managed communities.
The Threshold Changed — Get the Year Right
For decades the answer to "how much triggers a 1099?" was $600, and most of what you will find online still says exactly that. It is now stale. The One Big Beautiful Bill Act, signed in July 2025, raised the reporting threshold for both Form 1099-NEC and Form 1099-MISC from $600 to $2,000 — but only for payments made in calendar year 2026 and later, with the figure indexed for inflation in years after 2026.
That creates a two-regime situation volunteer treasurers need to keep straight:
| Payments made during | Threshold | Forms filed in |
|---|
| Calendar year 2025 | $600 | January 2026 (old rule applied) |
| Calendar year 2026 | $2,000 | January 2027 |
| 2027 and later | $2,000, adjusted for inflation | Following January |
Practically, the higher floor takes some small vendors off your list: the neighbor's kid who was paid $800 to pressure-wash the mailbox kiosks in 2026 no longer generates a form, where the same payment in 2025 did. Your recurring vendors — landscaping, pool service, management — will clear $2,000 easily and remain reportable. Thresholds and indexing details can shift, so confirm the figure against the current-year IRS General Instructions for Certain Information Returns before you file.
One caution: the threshold is a floor on your filing obligation, not on the vendor's taxes. The landscaper owes income tax on that $800 either way. Nothing stops you from filing a 1099 below the threshold, and nothing about the higher floor loosens your own record-keeping — you still need clean vendor payment totals to know who crossed the line.
Who Gets a 1099-NEC — and Who Doesn't
Form 1099-NEC reports nonemployee compensation: payments for services performed by someone who is not your employee. For an HOA, the test has three parts — the payment was for services, it exceeded the threshold for the year, and the vendor is not a corporation.
| Vendor | 1099-NEC? | Why |
|---|
| Sole-proprietor landscaper or handyman | Yes | Unincorporated, services |
| Landscaping LLC (taxed as sole prop or partnership) | Yes | LLC is not automatically a corporation |
| Landscaping company, Inc. or LLC taxed as S/C corp | No | Corporate exemption (check the W-9 box) |
| Law firm, any structure | Yes | Attorney exception — always reportable |
| Self-employed manager or bookkeeper | Yes | Unincorporated, services |
| Utility company, insurer | No | Corporations; utilities and insurance premiums are not reportable |
| Hardware store (materials only) | No | Goods, not services |
| Any vendor paid by credit card | No | The card processor reports it (see 1099-K below) |
Three points from that table deserve expansion.
The LLC trap
"LLC" tells you nothing. A single-member LLC taxed as a sole proprietorship is reportable; the same letters on a company taxed as an S corporation are exempt. The only way to know is the tax-classification box the vendor checks on its W-9 — which is why guessing from the company name is how boards end up filing forms they didn't need, or worse, skipping ones they did.
The attorney exception
The corporate exemption has one carve-out every HOA hits: legal fees. Payments to attorneys for legal services are reportable on the 1099-NEC even when the firm is incorporated. If your association paid its law firm above the threshold for collections work, covenant enforcement, or general counsel during the year, that firm gets a form no matter what its letterhead says. (A separate rule routes certain settlement-related gross proceeds to Form 1099-MISC instead — if your HOA settled litigation through a law firm, let your CPA sort which box applies.)
Services versus goods
Buying materials is not reportable; buying services is. When one invoice mixes both — the fence contractor who bills parts and labor together — you report the whole payment. Don't attempt to carve the lumber out of the labor.
One more form to know: if your association pays rent above the threshold — storage space, office space, equipment leases from an unincorporated lessor — that goes on Form 1099-MISC rather than the NEC. Most self-managed HOAs never touch it, but it exists.
W-9s: Collect Before the First Payment, Not in January
Every 1099 problem traces back to the same root: nobody got the W-9. Form W-9 is the one-page form where a vendor gives you its legal name, address, taxpayer identification number, and tax classification — everything you need to decide whether a 1099 is due and to fill one out. It costs the vendor two minutes in March. It costs your treasurer two weeks of unreturned phone calls in January, when the landscaper who got paid all season has stopped answering because the relationship — or the business — ended.
So make it policy, not a year-end scramble: no new vendor gets a first check until a completed W-9 is on file. Every vendor, including ones you assume are corporations and ones you expect to stay under the threshold — assumptions are exactly what the form exists to verify. This belongs in your written vendor onboarding checklist alongside proof of insurance and licensing; our vendor management guide covers where it fits in the full vendor lifecycle. W-9s don't expire, but ask for a fresh one when a vendor changes its name, structure, or ownership.
Backup withholding: the enforcement teeth
What if a vendor simply refuses to provide a TIN? The IRS's answer is backup withholding: you are required to withhold 24% from the vendor's payments and remit it to the IRS until a TIN is provided. The same applies if the IRS notifies you that a vendor's name and TIN don't match its records. In practice, telling a reluctant vendor "without a W-9 we're required to hold back 24% of every check" resolves the standoff quickly — and if it doesn't, an association should think hard about paying someone who won't identify themselves to the IRS. Skipping backup withholding when it was required leaves the association itself on the hook for the uncollected amount.
Deadlines and the E-File Mandate
The 1099-NEC runs on one unforgiving date: January 31 following the payment year (the next business day when the 31st falls on a weekend). Unusually, that single date covers both jobs — furnishing the copy to the vendor and filing with the IRS — and unlike most information returns, the 1099-NEC has no automatic extension. If you pay rent and file a 1099-MISC, the vendor copy is due January 31 but the IRS filing runs on a later schedule (end of February on paper, end of March e-filed); check the current instructions for the exact dates.
Then there is the e-file mandate. Since the 2024 filing season, any filer submitting 10 or more information returns in aggregate — counting all types together, including W-2s — must file electronically. An HOA with a couple of employees and a handful of vendors clears 10 faster than boards expect. The good news: the IRS's free IRIS portal (Information Returns Intake System) lets small filers e-file 1099s directly without buying software, and most CPAs and payroll services will handle the filing for a modest fee. Paper-filing when you were required to e-file counts as a failure to file correctly, which brings us to penalties.
Penalties Scale with How Late You Are
The penalty for a late or missing 1099 is assessed per form, and it climbs in tiers: one amount if you correct the failure within 30 days of the deadline, a higher amount if you file by August 1, and higher still after that. A separate, much larger per-form penalty applies to intentional disregard — a board that knew and chose not to file. The dollar figures adjust annually for inflation, so check the current IRS penalty schedule rather than a number from an old blog post; the structure is what matters for planning. And the penalties are symmetric: failing to furnish the vendor's copy is penalized separately from failing to file with the IRS, so one skipped vendor can generate two penalties.
The practical takeaway from the tier structure: late is always better than never. A board that realizes in March that it missed a form should file it immediately — the 30-day and August 1 tiers exist precisely to reward fast correction.
The 1099-K Note: Card Payments Aren't Yours to Report
One genuinely helpful carve-out: payments made by credit card, debit card, or third-party payment platforms are excluded from your 1099-NEC math. Those transactions are reported by the payment processor on Form 1099-K, and if you also included them on a 1099-NEC the vendor's income would be double-reported. So when totaling what you paid the landscaper, count checks, ACH transfers, and cash — and exclude anything that ran through a card. If you paid a vendor entirely by card all year, you file nothing for that vendor regardless of the amount.
A January Workflow That Takes an Hour, Not a Week
Here is the whole compliance job, in order:
- All year: W-9 on file before any new vendor's first payment; vendor payments recorded in the ledger, not scattered across board members' Venmo histories.
- Early January: pull total payments per vendor for the prior calendar year, excluding card payments.
- Apply the threshold for the payment year ($600 for 2025 payments, $2,000 for 2026 payments) and the corporate exemption per each W-9 — remembering attorneys are always in.
- File by January 31, e-filing via IRIS or your CPA if you hit the 10-return mandate, and send each vendor their copy.
- Keep copies with the year's financial records — your auditor and your future board will both look for them.
The step that breaks in self-managed communities is the second one: producing clean per-vendor payment totals. If the association's books live in a shoebox of statements, January means reconstructing a year of checks by hand. This is a place where real bookkeeping structure pays for itself — we make Effortless HOA, and its general ledger (seeded with a standard HOA chart of accounts) plus bank statement import means the year's vendor payment totals are a report, not an archaeology project. Whatever system you use, the principle is the same: 1099 season is easy for associations whose ledger already knows who was paid what.
Bottom Line
Your HOA issues 1099s like any other business: 1099-NEC to unincorporated service vendors and to attorneys, above $600 for 2025 payments and above $2,000 for 2026 payments and later, due January 31, e-filed if you hit 10 total returns. None of it is hard if the W-9 arrives before the first check and the ledger tracks vendors all year. All of it is miserable in reverse order — which is why the best 1099 policy is written in March, not January.
