Types of Corrections

There are two types of 1099 corrections: Type-1 and Type-2.

It is necessary to determine which type of correction is needed prior to creating a correction file


Type-1
A Type-1 will require only one form to complete the correction.
  • These errors involve incorrect dollar amounts, codes, or checkboxes entered on the form submitted to the IRS.

  • It is also applicable if a 1099 should not have been filed.

  • To create a correction file within our program, you will need to generate a new file that includes only the recipients requiring adjustments.
    Make sure to mark the 'Correction Code' box with an 'X' (correction code box is not case sensitive).

The example below is for a 1099-MISC Form (Type-1) that should not have been filed.
See the 'x' in the Correction Code box and the '0.00' in Box1 (Rents).


Type-2
A Type-2 will require two forms to complete this correction.
  • Type 2 error is created if the recipient's Taxpayer Identification Number (TIN) and/or name is incorrect, or the wrong form type was reported (e.g., 1099-MISC instead of 1099-NEC).

  • The first line of the Type-2 will include all the same incorrect information as originally sent except all dollar amounts
    will be zeroed and the correction code box will be marked with an 'X'. This "unfiles" the form.

  • The second form of the Type-2 will require a new line including all of the recipients correct information.
    This form should reflect what should have been filed the first time and will not be marked as a correction.

The example below illustrates a Type-2 correction for a form with an incorrect TIN.
(Only one of the forms will be marked as a correction.)




Return to Corrections ↪