Every year, 1099 season catches some registry owners off guard. Not because they do not know it is coming — but because the details pile up fast, and one small error can create a headache that lasts well past April.
This guide covers the basics: what a 1099 is, when you need to file one, and how to get it right without starting from scratch every January.
Want to learn more: Visit A Guide to Caregiver Registries and Taxes
Caregiver registries work with independent contractors, not employees. That means no W-2s, no payroll withholding — and yes, 1099s for any caregiver who earns $600 or more through your registry in a calendar year.
Getting this right is not just about the IRS. It is about maintaining the independent contractor relationship. A 1099 filed correctly reinforces that the caregiver is a contractor. A process that looks like payroll — or a registry that skips 1099s entirely — creates questions you do not want the DOL asking.
Before you file anything, make sure your caregiver agreements reflect an actual independent contractor relationship. Caregivers set their own rates, choose their clients, and control their own work. If your operating model does not match that description, the 1099 is the least of the issues to solve.
You will need:
The IRS requires this information on a completed W-9 form, which caregivers should fill out before they begin working — not in January when you are scrambling to file.
If a caregiver will not provide a W-9: You are required to withhold 24% of payments (backup withholding) and report that to the IRS. This is uncommon but worth knowing.
For most caregiver payments, you will use the 1099-NEC (Non-Employee Compensation). This is the standard form for independent contractor payments of $600 or more.
The 1099-MISC still exists but applies to different types of payments — rent, prizes, certain legal settlements. For caregiver pay, 1099-NEC is almost always the right form.
The 1099-NEC deadline is January 31 — both to send copies to the caregiver and to file with the IRS. This is earlier than many people expect.
If you are filing on paper, you mail copies to the caregiver, the IRS, and your state revenue agency (where required). If you are filing electronically, the IRS FIRE system handles the submission.
For registries with more than 10 returns: Electronic filing is required starting with the 2023 tax year and going forward. The IRS FIRE system (the IRS electronic filing portal) handles submissions for those filing electronically.
After filing, hold onto copies of every 1099, the caregiver's W-9, and your payment records for at least four years. These are the same records that support your audit readiness. They are not just tax documents.
If your registry uses a payment platform that tracks and disburses caregiver payments, ask whether it generates 1099s automatically from your transaction records. That is the cleanest setup — every payment is logged as it happens, and the 1099 data is ready to pull at year end without reconstructing anything.
Ally generates 1099s automatically based on payment records kept throughout the year. If you want to see how that works, we are glad to walk you through it.
Talk to Ally here