Form 1099 for Rent: Reporting and Correcting Forms for Rental Income

Did you receive a 1099 for rent this year? Tax laws related to 1099 forms for rental income have changed since Congress passed the American Rescue Plan Act in 2021, and the updates now affect rental property owners.

Today, we’re covering the essential information rental property owners need about 1099 forms for rent: what the 1099 is, why it’s important, which tenants should issue the forms, what to do when you receive one, and how to correct errors on a 1099.

Key Takeaways

• Form 1099-MISC is an informational return used to report nonemployee income.
• Noncommercial tenants are not required to file 1099 forms.
• Rental property owners are responsible for reporting all income received, even if they don’t receive a 1099.
• Recipients use 1099 forms to verify and document their annual income.
• The payer is responsible for correcting errors on 1099 forms.

What is a 1099?

You’re probably familiar with Form W-2, the Wage and Tax Statement the IRS uses to track taxpayer income from employment. The 1099 forms track taxpayer income produced by activities unrelated to employment. The IRS has 21 kinds of 1099 forms that you’ll use to report all types of income, from dividends and nonemployee compensation to payment card and third-party network transactions.

As a rental property owner, you may receive 1099 forms for rental income. The forms record several elements:

• Payer’s name and address
• Payer’s tax identification number
• Recipient’s name and address
• Recipient’s tax identification number
• Total applicable funds paid to the recipient during the year

To make sure these elements are correct, the IRS recommends using the W-9 to collect and verify the recipient’s information. The best practice is to collect the W-9 when you sign contracts or before you issue payments.

Why are 1099s for rent important?

Recipients use 1099s to verify their income totals and prepare their tax returns. Because one copy of the 1099 goes to the IRS, they match the form to your tax identification number. These information returns are one way the IRS finds missing income. The IRS can issue you a bill — along with a fine or an audit — if you fail to report that income on your tax return.

For rental property owners, that means reporting both rental income received and funds paid to contract workers. For this discussion, we’re focusing only on Form 1099 for rent.

Reporting 1099-MISC Rental Income

What is 1099-MISC rental income? Good question. Underreporting revenue can lead to a complete review of your tax returns, so getting your income figures right is important.

Rents received include more than just monthly rent payments. The amounts on your 1099 forms for rental income should include all of these payments as well:

• Advance rent payments: Rent payments made in December 2024 for the following year should be reported on your taxes for 2024.
• Constructively received income: Checks or payments you received or were available in 2024 but were not deposited until 2025 count toward your 2024 income.
• Payments made for canceling leases: If a tenant pays to break a lease, that payment counts as rental income.
• Payments received electronically: Payments received via third-party payment platforms like Zelle, PayPal, or Venmo are reportable.
• Property-related invoices paid by the tenant: If you usually cover a bill, but your tenant pays it instead, that payment counts as income.
• Services or property the tenant provides in lieu of rent: Sometimes, tenants barter goods or services to cover the rent. When this happens, establish the fair market value of the service or property provided, then record it as income.
• Withheld security deposits: If you keep all or part of a tenant’s security deposit because they didn’t meet the lease terms, that’s income. However, refundable lease deposits are not reportable as income.

Which tenants send 1099s for rent?

If your rental property business is set up as a corporation, none of your tenants are required to send you a 1099.

Noncommercial tenants are not required to file 1099 forms for sole proprietors or LLCs. However, if you own commercial rental property, you should expect to receive 1099 forms from your tenants or third-party payment processors if the rents received exceed the IRS threshold requirement. The IRS is lowering the thresholds over the next few years:

• 2024: Report rental income over $5,000
• 2025: Report rental income over $2,500
• 2026: Report rental income over $600

When it’s time to file 1099 forms, the tenant keeps a copy for their records and then sends it to both the landlord and the IRS. The type of 1099 you’ll receive depends on how the tenant pays you. Cash or check payments are reported on Form 1099-MISC. Electronic payments processed on third-party platforms like Venmo, Zelle, or PayPal are reported on Form 1099-K.

If you use a payment-processing platform that doesn’t include 1099 generation and filing, you are responsible for reporting the income.

Pro tip: TurboTenant uses Stripe to process payments. When a TurboTenant landlord reaches the income threshold, Stripe will generate a 1099 for them. You can learn more about Stripe’s 1099 filing requirements here.

What happens if a tenant fails to issue a 1099?

If you should have received a 1099 from a tenant but didn’t, contact the tenant and request the missing form. If it isn’t available by the end of February, you can ask the IRS for help. The IRS may assess penalties to payers who fail to file or file inaccurate information returns.

If you don’t receive the corrected forms in time to file your income taxes by the deadline, you may need to estimate your earnings and file for an extension. If you file your taxes based on incorrect figures, you may need to file an amended return. Filing taxes with inaccurate information may require you to submit an amended return. Work with your accountant or tax preparer in this situation.

How do you use 1099 rental income tax forms when filing tax returns?

When you receive a 1099 for rent, follow these steps:

• Review the information for accuracy. Check that your name, Social Security number or taxpayer ID number, and the income amount are correct. If any of the elements are inaccurate, you need to contact the payor or issuer.
• Report your rental income. Depending on your business structure, report all your rental income on Schedule C or Schedule E. The amount listed on your 1099 forms supports the income you declare when you file your taxes.
• Pay your income taxes. Once you file your taxes, you are responsible for paying any income taxes due, including estimated tax payments.
• Keep your 1099 forms as records. The IRS recommends keeping your federal tax records for at least three years and up to seven years. The recommendations for state taxes depend on your state’s tax laws.

What if the information on a 1099 is wrong?

Occasionally, 1099 forms will have errors. Someone may have used the wrong form, misspelled a name, entered an incorrect amount or tax ID number, or marked the wrong checkbox. If you receive a 1099 for rent with inaccurate information, contact the payer or the company that issued the form. They are responsible for correcting errors and filing corrected forms if needed.

Did you know? Some errors do not require a corrected 1099. If the payer’s name, tax ID number, or both are incorrect, the payer should report the mistake in a letter to the IRS.

You’ll need to request a corrected form if the original 1099 for rent has any of the following errors:

• The checkbox marked is incorrect.
• The payee’s name is wrong.
• The payee’s taxpayer ID is incorrect or missing.
• The payer should not have issued a 1099 form for rent.
• The payer used the wrong type of 1099.
• The payment amount is incorrect.
• The wrong code is listed on the form.

Which forms do you use to make 1099 corrections?

Remember, the payer or issuing agency is responsible for correcting your 1099 forms for rental income. When you contact the payer about the error, they will issue a corrected form. There isn’t a separate document for corrected 1099s. The payer will mark the Corrected checkbox at the top of a new form and send copies to the necessary parties.

The type of error that the payer made determines what your corrected form will look like. How the payer submitted their 1099 forms also affects how corrections are made. Payers must file corrected 1099 forms using their original filing method: either paper or electronic forms. Since the filing process varies based on the software, we’re limiting our discussion to correcting paper 1099 forms. Check with your software provider for more information on correcting electronic 1099s.

How to Correct 1099 Amounts, Codes, or Checkboxes

When a payer recorded the wrong amount, code, or checkbox — or shouldn’t have filed a 1099 — they’ll follow these steps:

1. The payer will prepare a new Form 1099-MISC.
2. They’ll enter an “X” in the Corrected box at the top of the form.
3. They’ll include the corrected amount, code, checkbox, and accurate information from the original 1099.
4. They’ll file the corrected forms and send copies to the necessary parties.

How to Correct 1099 Taxpayer IDs or Recipient Names

When a payer uses the incorrect name or taxpayer ID for the landlord or the landlord’s ID number is missing, the payer will follow these steps:

First, they’ll identify the incorrect return they filed.

1. The payer will prepare a new Form 1099-MISC.
2. They’ll enter an X in the Corrected box at the top of the form.
3. They will enter the payer, recipient, and account number information as it was listed on the original form — even though it was incorrect.
4. They will record a zero for all monetary amounts on the form.

Then, the payer will report the correct information.

1. The payer will prepare another new Form 1099-MISC for rental income.
2. They will not mark the Corrected checkbox on the new form.
3. They’ll include all the correct information.
4. They’ll file the corrected 1099 and related forms, sending copies of the new 1099 to the necessary parties.

How TurboTenant Can Help

Tax time is stressful, but you can make it easier on yourself with integrated property management and rental accounting software.

TurboTenant accounting enables DIY landlords to automatically record income from rent payments submitted through the platform to enhance accuracy and save time. Combined with expense tracking, you can generate financial reports that make filing your taxes more manageable for you or your CPA.

1099 For Rent FAQs