If you pay an independent contractor – also commonly referred to as a freelance worker - more than $10 for work done in the tax year, the Comptroller of Maryland requires that you issue that contractor a 1099. Form 1099 is a federal income tax form that indicates the amount of earnings paid to an independent contractor. You must provide 1099 forms to your contractors and the Internal Revenue Service. To file 1099 forms with the IRS, you must also file Form 1096. Maryland taxpayers file Form 1099 the same way as taxpayers in the rest of the country.
Call the IRS at 800-829-3676 to request 1099 and 1096 forms. The 1099 and 1096 forms available on the IRS website cannot be scanned by the IRS and therefore cannot be filed with the IRS. If you file a 1099 or 1096 form printed from the Internet, the IRS will fine you $50 per form.
Enter your name, address and tax identification number on the 1099 form, as well as the name, address and tax identification number of your subcontractor. In the correct boxes, input the amount of wages paid to your subcontractor. Complete a 1099 for each subcontractor.
Add the total amount of wages paid to subcontractors from each 1099 you are filing and input the total on Form 1096, line five. Fill out the rest of Form 1096, which requires your name, address and taxpayer identification number. Enter the number of 1099s you are filing on line three of your 1096.
Mail form 1096 and Copy A of each 1099 form to the IRS. Maryland taxpayers must mail copies to:
Department of Treasury Internal Revenue Service Center Kansas City, MO 64999
Give or mail Copy 1, Copy 2 and Copy B to the subcontractor listed on the respective 1099 form. Keep Copy C for your records.
The Comptroller of Maryland does not require taxpayers to file 1099s separately for federal and state taxes. According to the Comptroller of Maryland’s website, the Comptroller participates with the IRS’ combined federal and state filing program, which means the IRS forwards 1099 information to the Maryland Comptroller when it is received.