Internal Revenue Service Copy
The top copy of the 1099 form is red. The information entered on this form is transferred to the forms underneath during printing. The red copy is labeled "Copy A" for Internal Revenue Service Center. The payer sends this copy to the IRS to report your income and any deductions withheld.
The copy labeled "Copy C" is retained by the payer issued the 1099 form. The payer keeps this copy as a record of income and any deductions reported. If you or any government agency find a mistake on the 1099 form issued, the payer uses this copy to compare to his records and make corrections.
Recipients will receive two copies of the 1099 form. The copies will be labeled "Copy 2" and "Copy B." These forms are identical and will have the year of the forms listed in a box on the top right side of the form. "Copy 2" is sent along with your state income tax return, if you are filing a paper return. If you e-file, you keep this copy and the recipient copy for your records.
"Copy 1" is sent to your state government. At the bottom of the form is a place to report any state tax withheld from the income reported on the 1099 form. State governments use this information to compare information you submit on your state income tax return, if you are e-filing.