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1099s for attorneys: fees vs. settlements

Lawyers are the big exception to "corporations don't get 1099s". The form depends on whether you paid for their work or paid money through them. Pick what you paid for.

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Short answer

Payments to lawyers are reported even when the law firm is a corporation. Fees for legal services to your business go on Form 1099-NEC, box 1a, once they reach $2,000 for 2026 ($600 in 2025). Money paid to an attorney that isn't for their services, like a settlement paid to a claimant's lawyer, goes on Form 1099-MISC, box 10, as the full gross amount once it reaches $600, even if the check names both the attorney and the claimant. The claimant may get their own Form 1099-MISC for taxable damages, generally in box 3.

  • 1099-NEC due January 31; 1099-MISC box 10 recipient copy due February 15
  • Don't subtract the attorney's fee share from gross proceeds
  • In-house lawyers on payroll get a W-2
  • Personal legal bills aren't reported

Last reviewed against the IRS Instructions for Forms 1099-MISC and 1099-NEC (Rev. December 2026).

I paid an attorney…

The rules, payment by payment

Legal fees for work done for your business

1099-NEC

  1. Total what you paid each law firm for services during the year.
  2. If it reaches the threshold ($600 for fees paid in 2025, $2,000 for fees paid in 2026 and later), file a 1099-NEC, even if the firm is a corporation or LLC taxed as one.
  3. Due January 31 to both the firm and the IRS.

Fees paid by credit card are reported by the card processor on a 1099-K, so leave them off.

Settlements and other gross proceeds paid to an attorney

1099-MISC, box 10

  1. When you pay money to an attorney that isn't for their services to you, such as a settlement or judgment payable to a claimant's lawyer, report the full amount to the attorney in box 10 of Form 1099-MISC, generally once it reaches $600. The attorney's fee share isn't separated out.
  2. This applies whether the firm is incorporated or not.
  3. The recipient copy is due February 15; the IRS copy is due February 28 on paper or March 31 if you e-file.
  4. The claimant may need their own form too, depending on what the money is for: a W-2 for back wages, or a 1099-MISC for other taxable damages.

Settlement reporting can get complicated, for example with physical injury awards, which are generally not taxable. Check the 1099-MISC instructions or a tax advisor for unusual cases.

Lawyers on your payroll

W-2

  1. An in-house attorney who is your employee gets a W-2 for their wages, like any other employee. No 1099.

Personal legal fees

No 1099

  1. 1099 reporting only applies to payments made in the course of a trade or business. Paying a lawyer for your own will, divorce or home purchase isn't reported.

Why the attorney rules are different

Most payments to corporations are exempt from 1099 reporting. Attorneys are one of the few exceptions, along with medical and health care payments, because the IRS wants to see legal fees and settlement money that pass through law firms. That's also why it's important to get a W-9 from every law firm you pay, whatever its structure.

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Questions

Attorney 1099 questions

Do I send a 1099 to my lawyer if their firm is a corporation?

Yes. Payments to attorneys are an exception to the usual rule that corporations don't get 1099s. Fees you pay a lawyer for legal services to your business go on Form 1099-NEC once they reach the threshold, whether the firm is a sole practice, partnership or corporation.

What's the difference between attorney fees and gross proceeds?

Fees are what you pay a lawyer for working for you; those go on 1099-NEC. Gross proceeds are money you pay to a lawyer that isn't for their services to you, typically a settlement or judgment paid to the other side's attorney; those go on 1099-MISC, box 10.

Who reports a lawsuit settlement paid to a claimant's attorney?

The payer of the settlement, often the defendant or its insurer. If the payment goes to the claimant's attorney, the payer reports the full amount to the attorney on 1099-MISC box 10. The claimant may also need a form, depending on what the settlement is for. For example, back wages go on a W-2, while other taxable damages usually go on 1099-MISC.

When is the 1099-MISC with box 10 due?

The recipient copy is due February 15, later than most 1099s, and the IRS copy is due February 28 on paper or March 31 if you e-file. A 1099-NEC for legal fees is due January 31 to both.

Do I need a W-9 from a law firm?

Yes. Ask for one before you pay. You need the firm's TIN for the 1099, and if you don't get one you're required to backup withhold 24%.

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1099-NEC and 1099-MISC, filed together

EFileForMe e-files both forms with the IRS and can print and mail recipient copies.

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