Moore Stephens
Taxation

Payments to U.S. subcontractors

Does your Canadian company have U.S. agents who solicit in the U.S.? Have you paid subcontractors, who are not employees of your company, to provide services to your American customers? If so, you may be required to file U.S. “Form 1099-MISC” tax slips.

The U.S. tax form “Form 1099-MISC” must be filed to report to the Internal Revenue Service (“IRS”) payments made by any corporation (Canadian or U.S.) to a individual (either to a non-employee agent or subcontractor of the company) for services rendered in the United States or to foreign countries. U.S. legal advisors. A corporation must prepare and remit the tax slip to the beneficiary in question only if the total amount paid to that beneficiary during the year is US$600 or more.

Sheets to produce
All Canadian and U.S. companies must file the following forms with the IRS in connection with the amounts paid:

    • Form 1099-MISC” slips; and
    • Form 1096″ summary.

These forms can be produced electronically or on paper. Please note that the slips and summary must be printed on the original IRS forms.

Production deadline
The deadline for sending forms to the IRS for payments made in calendar year 2018 is January 31, 2019. Form 1099-MISC” slips must be delivered to beneficiaries no later than January 31, 2019 (or February 15, 2019 for slips intended for U.S. counsel); otherwise, you may be subject to penalties.

YOU CAN CONTACT MRS. CHRISTINE PICHÉ, A MEMBER OF OUR INTERNATIONAL TAX TEAM, FOR ANY QUESTIONS RELATING TO THIS TAX NOTE:

Christine Piché
Technician
Telephone: 514-878-3588, ext. 399
Email : cpiche@demersbeaulne.com

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