Made a mistake on your 1099?
Understanding the Difference between
Type 1 and Type 2 Corrections
If you file 1099 forms, you may make or discover errors. Thankfully, with a little awareness and action, you can correct them quickly.
What are the most common types of 1099 errors and how do you fix them? Let’s take a closer look.
Understanding the Two Types of Errors
Form 1099 errors fall under two categories, which in turn affect the corrections process:
Incorrect money amount(s), code or checkbox
Incorrect payee name
A return was filed that shouldn’t have been
These errors require only one form to make the corrections.
If the original incorrect form was paper filed, you must paper file a Type 1 correction. Paper filing a correction using these steps:
Prepare a new information return.
Enter an “X” in the CORRECTED box (and optional date) at the top of the form.
Enter the corrected information, such as money amounts.
Include a new 1096 with an “X” in the CORRECTED box with the filed 1099.
Once you have your forms prepared, you will need to print and mail copies to your recipients and file paper copies with the IRS.
Note: You don’t need to include the original incorrect form.
If the original form with a Type 1 error was e-filed, you must e-file a correction. eFile4Biz.com can process Type 1 dollar amount corrections for 1099 forms, no matter whether you originally e-filed with us or on another website!
When e-filing a Type 1 correction with eFile4Biz.com, you can simply:
Log in and select “Correction Forms” in the “Filing Center” tab.
Find the form and click on the “File a Correction” link to the far right. (Please note: If the link says, “Temporarily Unavailable,” you will need to wait until the form is accepted by the IRS.) If you e-filed the original form on a different website, select the correction form from the selection of correction forms presented.
Make the correction.
Resubmit the form with payment.
Once you have submitted your corrected form, we will print and mail a corrected 1099 to the recipient, and e-file the 1099 Correction with the IRS.
Missing or incorrect payee number (TIN, SSN, EIN, QI-EIN or ITIN)
Incorrect name and/or address
Original return filed with the wrong form (e.g. 1099-MISC to complete a 1099-DIV)
The process is a little more detailed with Type 2 errors, requiring two forms. When paper filing, you must:
Prepare a tax information form
Enter an “X” in the CORRECTED box (and optional date) at the top of the form
Enter the payer, recipient and account number information exactly as it appeared on the original incorrect return; however, enter “0” for all money amounts
The second stage is to report the correct information, as follows:
Prepare a second new information return as if it’s an original (so don’t enter an “X” in the CORRECTED box at the top of the form)
Make all the corrections on the form, such as the fixed TIN, name and/or address
Include a new 1096 (with the words “Filed to Correct TIN,” “Filed to Correct Name and Address” or “Filed to Correct Return” in the bottom margin of the form) with the filed 1099
For more information on Type 1and Type 2 errors, visit IRS.GOV.
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