If a check is written out of an escrow account to the client pursuant to a written promissory note, should the payee be issued a 1099?”
“If we understand your question correctly, it appears that your company owes a promissory note to one of your clients. Yes, you would be required to report the interest payments on form 1099-INT to the client if they are an individual. Payments to a corporation would not be required to be reported. You would want to obtain form W-9 from the client to have them certify their taxpayer ID and their exemption from backup withholding taxes.
Related Questions
- What if I dont have a written retainer agreement, can I still deposit the fees in my business account even if the client has no objection?
- Do I need to issue a 1099-Misc to a client for payments on a loan made from the clients Escrow (IOLTA) account?
- How quickly is Bill Pay updated when a new payee is added or when a payment account number is changed?
