North Bay Real Estate Blog

In a Legal Q&A inside a recent CA Assoc. of Realtors Magazine, the following question was asked and answered:

Q - I'm a landlord, and I heard that I now need to give an IRS Form 1099 to my plumber who works on my rental properties. Is that true?

A - Yes, if you pay your plumber $600 or more over the year for the work on your rental properties. Under one provision of a new federal law, Section 2101(h) of H.R. 5297 (Small Business Jobs and Credit Act of 2010) that went into effect Jan. 1, 2011, any person who receives rental income must provide an IRS Form 1099 for all aggregate annual payments of $600 or more made to a service provider such as a plumber, carpenter, gardener, or handyman. This new law applies to both residential and commercial property. In previous years, only real estate licensees doing property management were required to file the 1099, not property owners. Congress has extended this requirement to "a person receiving rental income from real estate."