Do I need to 1099 my subcontractors as a roofer?
If you paid a subcontractor $600 or more during the year by check or ACH, you almost certainly need to file a 1099-NEC for them. This applies to individuals and single-member LLCs. It does not apply to corporations. That distinction matters because some of your subs may be incorporated and some may not be, and the only way to know is to collect the right paperwork upfront.
The form you need from every subcontractor before you pay them is a W-9. The W-9 tells you their legal name, tax ID number, and business entity type. That entity type determines whether you need to file a 1099 at year-end. Collect W-9s when you bring a sub on, not in January when you’re scrambling to file. Chasing down paperwork from someone you haven’t worked with in six months is frustrating and often unsuccessful.
Payment method also matters. Payments made by check or bank transfer (ACH) require a 1099-NEC. Payments made through credit card or third-party processors like PayPal or Venmo for Business do not, because those platforms issue their own 1099-K forms. If you pay the same sub by both check and Venmo, you only report the check and ACH amounts on your 1099-NEC.
The filing deadline is January 31 of the following year. You send one copy to the subcontractor and file the other with the IRS. Late filing penalties start at $60 per form and go up from there depending on how late you are. If the IRS determines you intentionally disregarded the requirement, the penalty jumps to $630 per form with no cap.
Roofing businesses tend to use a lot of subcontractors for crews, tear-off work, gutter installation, and other specialty tasks. That can add up to a significant number of 1099s. Having a system in place throughout the year makes January much easier. Keep a folder for W-9s, track payments by sub in your accounting software, and you won’t be guessing at year-end. Our 1099 preparation service handles the filing side so you can focus on running jobs instead of chasing forms.
One more thing worth mentioning. Filing 1099s correctly protects you in an audit. If you deducted $40,000 in subcontractor expenses but never filed the corresponding 1099s, the IRS may question those deductions. Proper filing creates a paper trail that supports what you claimed on your tax return.
If you’re unsure whether your current process covers everything or you’ve fallen behind, Rock Steady Bookkeeping can help you get caught up and set up a system that keeps you compliant going forward.
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