Most HOAs are, for tax purposes, treated as a business — which means when they pay independent vendors, they can be on the hook to issue Form 1099-NEC at year-end. Miss it and the association can face penalties per form. The good news: 1099 season is entirely predictable, and almost all of the pain comes from not collecting one simple form up front.
Here is a practical checklist for boards and community managers. (This is general information, not tax advice — confirm the specifics with your association's CPA, because the rules have changed recently and vary by situation.)
What a 1099-NEC is for
Form 1099-NEC ("Nonemployee Compensation") reports payments your association made to independent contractors for services during the year. If you paid a landscaper, a pool company, a porter service, a handyman, or an attorney, those payments may need to be reported to the IRS on a 1099-NEC, with a copy to the vendor.
It applies to independent vendors — not to employees (who get a W-2) and generally not to purchases of goods.
The threshold — and the change boards are missing
For years the statutory threshold in Internal Revenue Code §6041 was $600: pay a qualifying vendor that much or more in a calendar year and you issue a 1099-NEC.
That figure changed. The federal budget reconciliation act signed in July 2025 (Public Law 119-21) raised the 1099-NEC and 1099-MISC reporting threshold from $600 to $2,000, effective for payments made after 31 December 2025, and indexed it for inflation in later years. Both are statutory figures — the law's, not anyone's estimate — and the effective date is what decides which one you use:
- Payments made in 2025, reported in early 2026: the $600 threshold.
- Payments made in 2026, reported in early 2027: the $2,000 threshold.
This is a recent change, the inflation indexing moves the number again in future years, and state reporting rules do not always follow the federal one. Confirm the figure that applies to your filing year, and your state's own requirement, with your association's CPA before you decide a vendor does not need a form. Getting it wrong in either direction — filing when you did not need to, or skipping a required form — is avoidable.
Who does NOT get a 1099
A few important exceptions save you work:
- Corporations. Payments to vendors organized as C-corporations or S-corporations generally do not require a 1099-NEC. The big exception: attorneys get a 1099 even if they are incorporated.
- Payments made by credit card or third-party networks. If you paid a vendor by credit card, debit card, or a third-party payment platform, that payment is reported by the card processor on a 1099-K — you should not also report it on a 1099-NEC. This trips up a lot of associations; only report what you paid by cash or check.
- Employees. Anyone on payroll gets a W-2, not a 1099.
The vendor's W-9 (below) tells you their entity type, so you know which of these applies.
The single most important habit: collect the W-9 up front
Nearly every 1099 headache traces back to one thing — not having the vendor's W-9. Form W-9 gives you the vendor's legal name, address, taxpayer identification number (EIN or SSN), and entity type: everything you need to issue a 1099 accurately.
The fix is simple and it should be a hard rule: get a signed W-9 before you issue the first payment to any new vendor. Chasing a W-9 in January — after the work is done and the vendor has no incentive to respond — is miserable and sometimes impossible. Collecting it at onboarding takes thirty seconds and saves the whole scramble.
If a vendor refuses to provide a W-9, the IRS rules allow (and may require) backup withholding on their payments. Loop in your CPA if that ever comes up.
The deadlines
For each applicable filing year, the key date is the same:
- January 31 — 1099-NEC forms must be furnished to vendors and filed with the IRS.
That is an early, firm deadline, which is exactly why the W-9 needs to already be in hand. If you are filing ten or more information returns, the IRS generally requires electronic filing, so factor that in.
A clean year-end checklist
Run this every December so January is boring:
- Pull vendor payment totals for the calendar year, split by payment method (only cash/check payments count toward 1099-NEC; card payments are excluded).
- List every vendor at or above the applicable threshold for that filing year.
- Match each to a W-9. Missing one? Request it now, not in late January.
- Drop out the exceptions — corporations (except attorneys) and card-paid vendors.
- Prepare and send the 1099-NECs to vendors and the IRS by January 31.
- Keep copies and the W-9s on file with your association records.
Where good records make this trivial
The reason 1099 season is painful is almost never the tax rule — it is scattered records. Payments split between checks and cards, a couple of vendors whose W-9s were never collected, and no single place showing what each vendor was actually paid.
This is where a platform quietly earns its keep, and the W-9 is the clearest case. On HOAcrew a company's W-9 is collected during onboarding and it gates payout: HOAcrew cannot pay a company that has not filed one. That is the January scramble removed at the source, because the form is on file before the first dollar moves rather than requested after the last one did.
The totals are assembled the same way. Each company issues its own invoice, every one of them lands in your community's consolidated view, and you pay each there — so a year's payments to a given company are already a list rather than something you rebuild from bank statements. Sales tax and payment processing sit as their own line items, which is exactly the split you want when you are separating what you paid for services from what you paid in tax and fees.
HOAcrew is where a board runs this. Vetted independent local companies submit proposals against the scope you publish; your board compares them side by side, selects one, and the contract is between your community and the company it chose. HOAcrew verifies the three documents that decide a bid — general liability, workers' compensation and the credential that company's trade requires, and an admin reads each certificate of insurance and files what the document says, with every expiry date held against the limits your community sets. Every company's own invoice arrives in one view, with the visit records beside it.
Even if you handle everything in a spreadsheet, the lesson holds: collect the W-9 before the first check, track payments by method, watch the current threshold, and hit January 31. Do that and 1099s go from an annual fire drill to a fifteen-minute task.