Are Community Associations required to file 1099s?

By Lanier Coulter, Esq.

Published December 24, 2012

  

The simple answer to this question is yes.  However, let me preface everything I'm about to write with the following: a) I am not a CPA and b) I recommend consulting your CPA and/or tax advisor concerning any tax-related positions or filings your community association is contemplating BEFORE a decision is actually made.

 

In general, community associations are required by the IRS to issue 1099s to any independent contractor to which they paid more than $600 in a calendar/fiscal year (have the treasurer check your association's books for this information) for the performance of services on behalf of the association.  Services include, but are not limited the following: landscaping, pool maintenance and management, plumbing, roofing, painting, etc.  There are some specific situations, like rental payments, where the filing of a 1099 is still required even though the $600 threshold may not have been met.

 

A 1099 is like a W-2 for an independent contractor.  So, how do you get the information you need from the independent contractor in order to accurately complete the 1099?  You ask them to provide you with a W-9.  Form W-9 contains pretty much all the information you will need to complete each respective 1099 like the independent contractor's tax ID number, business address, type of business, etc.  You do not file W-9s with the IRS, rather, you keep them on file for 1099 preparation purposes.

 

Your association's treasurer or management company should make it a practice to annually obtain a W-9 from any independent contractor you hire BEFORE you pay them anything.  However, if you haven't done so already, now is the time to start requesting W-9s of your independent contractors as generally, 1099s must be provided to any independent contractor performing services on behalf of your association by January 31st to allow the recipient of the 1099 sufficient time to dispute the amount(s) reported and/or correct any errors contained on the form.  Again, generally, 1099s must be filed with the IRS (and any applicable state or local taxing authorities) by the last day in February.  Electronic filers have until March 31st of each calendar year to file, however.  Oh, and in case you were wondering, in general, there is a $100 penalty associated with each 1099 that is not filed, filed late or filed inaccurately.


 
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G. Lanier Coulter, Jr. - owner/founder of the firm. He is a 1998 graduate of Oglethorpe University and a 2001 graduate of Emory University School of Law, where he was the recipient

of the Attorneys' Title Guaranty Fund Award.  

 

Lanier is a member of the state Bar of Georgia and the DeKalb County Bar Association.  He is the author of "Don't Wait Until it's Too Late, Statutes of Limitation and How They Can Affect Your Association's Rights" which appeared in Georgia Commons, a Publication of Community Associations Institute of Georgia, Inc.  

 

Lanier practices primarily in the area of community association law.  Lanier assists associations in interpretation and enforcement of their governing documents (covenant enforcement and collection of assessments) and in the negotiation, financing and execution of major renovation and rehabilitation projects.  He is an instructor of continuing education courses for community association managers and attorneys, including, "Dealing With Difficult People," "Problem Solving for Planned Communities," and "Condominium Law." 

 

Currently Lanier serves as a member of the Amicus Committee the Community Association Institute and a member of the Legislative Action Committee for the Georgia for Chapter of the Community Association Institute.  He was the recipient of the 2011 Rising Star Award in the CAI-Georgia Chapter.

Contact Lanier at: glc@coulterlawfirm.net