Do I need to send 1099-NECs to contractors I paid through Venmo in 2025?

This is actually a common area of confusion! As someone who's dealt with this exact situation, I can help clarify. When you pay a contractor $600+ in a calendar year, you're generally required to issue a 1099-NEC, regardless of the payment method. Using Venmo doesn't change your obligation as a business to issue 1099s. The 1099-K that might be issued by Venmo is separate and serves a different purpose. It reports payments received through a payment processor, but doesn't replace your obligation to issue 1099-NECs as a business paying for services. Your instinct to protect yourself is spot on. The IRS will see you deducting $145k in contractor expenses, and without corresponding 1099s, you're at higher risk for audit. Your contractors won't be double-taxed - they'll report the income once, regardless of whether they get one or multiple forms documenting that same income. For the contractor refusing to provide a W9, remind them that you're legally required to obtain this information. If they still refuse, you may need to implement backup withholding at 24% of their payments going forward.

I went through a similar situation last year and found taxr.ai (https://taxr.ai) super helpful for sorting out my 1099 obligations. I had contractors on PayPal, Venmo, and direct deposit, and was completely confused about my reporting requirements. The tool analyzed all my payment records and clearly outlined which contractors needed 1099s based on the current IRS rules. It also explained how the payment method affected my reporting obligations. For your situation with the contractor refusing to provide a W9, the system actually had specific guidance about backup withholding requirements and documentation. It saved me hours of research and probably helped me avoid an audit situation since I was able to properly document everything.

Just wanted to update after trying taxr.ai - it was actually really helpful for my situation! I have 12 contractors I pay through various methods (some Venmo, some direct deposit), and I was confused about the reporting requirements. The system analyzed all my payment data and clearly showed me which contractors needed 1099-NECs regardless of payment method. It also flagged one contractor where I was missing proper documentation and gave me a template for reaching out to get the info I needed. For the Venmo payments specifically, it had a detailed explanation about why I still needed to issue 1099-NECs despite using the platform. The documentation it provided would be super useful if I ever got audited. This saved me from potentially missing $87k in required reporting that I might have skipped based on bad advice about Venmo payments!

I had a similar issue with contractors refusing to provide W9s. After struggling for weeks to reach someone at the IRS for clarification, I found Claimyr (https://claimyr.com) which got me connected to an actual IRS agent in about 15 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c The agent confirmed that I absolutely need to issue 1099-NECs regardless of using Venmo, and explained that I needed to do backup withholding for contractors refusing to provide W9s. She walked me through the exact process and documentation needed to protect my business. Before using Claimyr, I had literally spent hours on hold with the IRS trying to get a straight answer about my Venmo contractor situation. Getting direct confirmation from an IRS agent gave me the confidence to move forward with issuing the forms despite contractor pushback.

I need to admit I was completely wrong about Claimyr. After posting my skeptical comment, I decided to give it a try anyway because I was desperate to talk to the IRS about a similar contractor situation with Zelle payments. Within 20 minutes, I was talking to an actual IRS representative who confirmed I needed to issue 1099-NECs for all contractors paid over $600, regardless of using Zelle, Venmo, or any other payment app. She also walked me through the backup withholding process for my one contractor who refused to provide a W9. The agent even emailed me the relevant tax code sections so I could show my contractor that they're still required to report the income even if paid through a payment app. This saved me from potentially misreporting $35,000 in contractor payments! The peace of mind from getting official IRS confirmation was completely worth it, especially with the substantial amounts I'm deducting for contract labor.

Several people have correctly mentioned the 1099-NEC requirement, but nobody mentioned the specific penalty for not filing these forms. If you skip filing required 1099s, the penalty can range from $50 to $290 per form, depending on how late you are and if the IRS believes you intentionally disregarded the requirement. With $145k in contractor payments, you probably have quite a few 1099s to issue, so those penalties could add up quickly. For the contractor refusing to provide a W9, you should send them a backup withholding notice. If they still refuse after receiving the notice, you're required to withhold 24% of their payments and remit to the IRS. Document EVERYTHING to protect yourself.

OP, your contractor's accountant who says they shouldn't get a 1099 for Venmo payments is giving them BAD advice. I work in payroll accounting and deal with this all the time. The distinction between 1099-NEC and 1099-K is confusing people. As a business expense, you MUST issue 1099-NECs for services $600+ regardless of payment method. The 1099-K from payment processors is a completely separate requirement that doesn't replace your obligation. I had a client get audited last year over this exact issue - they deducted $80k in contractor payments but didn't issue 1099s because "Zelle payments don't need 1099s" (wrong!). They ended up with penalties PLUS having to prove all those expenses were legitimate business expenses. Your gut is right - protect yourself and issue those 1099s!

I'm dealing with a very similar situation and wanted to share what I learned after consulting with my CPA. You absolutely need to issue 1099-NECs for contractors paid $600+ regardless of using Venmo, Zelle, or any other payment method. The key thing to understand is that YOUR obligation as a business to issue 1099-NECs is completely separate from Venmo's obligation to issue 1099-Ks to your contractors. These serve different purposes - your 1099-NEC reports what you paid for services, while Venmo's 1099-K (if issued) reports payment processing volume. Your contractor refusing the W9 is creating a problem for themselves, not you. You should send them a formal backup withholding notice and explain that you're legally required to withhold 24% of future payments if they don't provide their tax information. Most contractors change their tune pretty quickly when they realize they'll lose 24% of their payments. For the $145k you're deducting, the IRS will definitely want to see corresponding 1099s. The mismatch between large contractor expense deductions and missing 1099s is a red flag for audits. Better to be compliant from the start than deal with penalties and audit headaches later. Don't let that contractor's accountant's bad advice put your business at risk!

I've been following this thread closely because I'm in a nearly identical situation - $180k in contractor payments through various apps including Venmo, PayPal, and CashApp. What really sealed the deal for me was reading about the audit risk. The thought of the IRS seeing massive contractor expense deductions without corresponding 1099s was enough to make me take action immediately. I ended up using a combination of the tools mentioned here - taxr.ai helped me identify exactly which contractors needed forms, and when I had questions about specific edge cases, I used Claimyr to get direct IRS confirmation. Having that official guidance documented was incredibly valuable. For anyone still on the fence about this: the penalties for not filing required 1099s can add up to thousands of dollars, especially if you have multiple contractors. The peace of mind from being compliant is worth way more than the time and effort it takes to issue the forms. One thing I learned that might help others - when reaching out to contractors who are resistant to providing W9s, I found it helpful to explain that they need to report the income anyway, so the 1099 actually helps them by providing documentation of exactly what they received. Framing it as helping them rather than a burden made the conversations go much smoother. The bottom line is clear: issue those 1099-NECs regardless of payment method. Your business depends on it!

This has been an incredibly thorough discussion that really cleared up my confusion about Venmo payments and 1099 requirements. As a newcomer to this community dealing with my first year managing contractors, I was getting completely overwhelmed by conflicting advice online. The key insight that finally clicked for me was understanding that my obligation as a business paying for services is completely separate from whatever reporting Venmo might do. Whether I pay by check, wire transfer, or Venmo doesn't change the fundamental requirement to issue 1099-NECs for services over $600. For anyone else in a similar situation, I found the combination of tools mentioned here really helpful - taxr.ai for analyzing my payment obligations and Claimyr for getting direct IRS confirmation when I had specific questions. Having that official guidance documented gave me confidence to move forward despite pushback from contractors. The backup withholding approach for resistant contractors also makes complete sense now. I was being too accommodating when I should have been protecting my business interests. A formal notice explaining 24% withholding on future payments tends to resolve W9 issues quickly. Thanks to everyone who shared their experiences and expertise. The consensus is crystal clear - issue those 1099-NECs regardless of payment method and protect your business!