Q: Two lawyers were paid by the Trustee of a Trust ($150 and 1,581). Do they need to get 1099s from the trust?
A:
When a trust pays an attorney more than $600 in a calendar year, the trust generally needs to issue a Form 1099-NEC to that attorney. This applies to both individual attorneys and law firms, regardless of the amount of work performed. The form is used to report non-employee compensation to the IRS.
In the case you mentioned, since the payments were $150 and $1,581, only the payment of $1,581 would typically require a 1099-NEC. However, the $150 payment might not require reporting because it's below the $600 threshold.
It's important to ensure that you issue these forms by the IRS deadline to avoid penalties. If you have any doubts or need further clarification, it's always wise to double-check the specific rules or consult the IRS guidelines directly.
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