Utah Contractor Practice Exam

Which of the following is NOT an obligation of the employer relating to a 1099 form?

1. Issuing it to employees on payroll

2. Issuing it to nonemployees

3. Providing it to freelancers who meet the payment threshold

4. Submitting it to the IRS

The correct answer is: Issuing it to employees on payroll

The obligation of an employer related to the issuance of a 1099 form centers around reporting payments made to non-employees, such as freelancers or independent contractors. The primary purpose of the 1099 form is to report income for individuals or entities who are not classified as employees. When considering the correct answer, it's important to recognize that employers are required to issue 1099 forms to non-employees, comply with thresholds for payments to freelancers, and submit these forms to the IRS, making those options valid obligations. However, issuing a 1099 form to employees is not a requirement. Employees are reported on a W-2 form instead, which details their wages, tips, and withholdings. Therefore, the obligation to issue a 1099 form specifically applies to non-employees and does not extend to employees on payroll. This distinction is central to understanding the classifications of workers and their reporting requirements.