Do You Need to Issue a 1099 to Your Cleaning Service or Handyman?

You've hired someone to deep-clean the daycare space twice a month. Maybe a handyman patched the fence around your play area, or a friend covered for you for a week while you were sick, and you paid her in a lump sum instead of putting her on payroll. Tax season rolls around and a question you hadn't thought about lands on your desk: do you have to send any of these people a tax form?

Most of the attention around 1099s and home daycare goes the other direction — a provider receiving a 1099-NEC from a parent who paid through a business account. This is the flip side. When you're the one paying someone else for services, in some cases you become the one responsible for issuing the form, not receiving it.

The basic framework

If you're running your home daycare as a sole proprietor — which most solo providers are — you're a business for tax purposes, even though it doesn't feel like one when you're writing a check to the guy who fixed your porch step. Businesses that pay an unincorporated person or company for services generally have to report those payments to the IRS using Form 1099-NEC (Nonemployee Compensation), and send a copy to the person or company you paid.

The dollar threshold that triggers this requirement was $600 in a calendar year for decades, but it changed under the One Big Beautiful Bill Act, signed in 2025: for payments made on or after January 1, 2026, the threshold rises to $2,000, indexed for inflation in future years. If you're reading this for a prior tax year, the old $600 threshold still applies to those payments — the $2,000 figure only governs payments made in 2026 and later. Either way, confirm the threshold for the specific filing year directly on IRS.gov or with a tax preparer before assuming either number, since this is exactly the kind of figure worth a quick double-check rather than relying on memory from a prior year.

This requirement applies specifically to payments for services, not goods. Buying cleaning supplies at a store doesn't trigger it. Paying a person or an unincorporated business to perform work for your daycare — cleaning, repairs, occasional childcare coverage, bookkeeping — is what puts you in 1099 territory.

Who typically needs one

Payments that commonly cross the threshold and call for a 1099-NEC from a home daycare:

• A cleaning service you pay directly and regularly, if it's a sole proprietor or an unincorporated partnership rather than a corporation
• A handyman or contractor who did repair work on your daycare space — fixing a gate, patching drywall, repairing play equipment
• An occasional substitute or helper you paid directly as an independent contractor rather than as an employee (this is a meaningfully different question from whether that person should legally be a contractor versus an employee in the first place — more on that below)
• A bookkeeper or other professional you hired on a freelance basis to help manage your business records

Who typically doesn't need one

• A corporation, including most LLCs that have elected to be taxed as a corporation. You'll generally know this from the W-9 they give you (see below) — it will show their entity type.
• Personal, non-business purchases. If you hired someone to paint your kitchen, that's not a daycare business expense and isn't part of this at all.
• Payments made by credit card or through a third-party payment network (think a payment app that itself issues reporting forms) are typically excluded from your own 1099-NEC filing obligation, because the payment processor may have its own separate reporting requirement for that transaction. This distinction has real nuance — if you pay a contractor through a card or app rather than cash or a personal check, it's worth confirming with a tax preparer whether you're still on the hook.

Collect the W-9 before you pay — not in January

This is the single most common way providers end up scrambling. You hire someone for a one-time job, pay them, and move on. Eight months later, you're trying to file a 1099 and you don't have their legal name, their address, or their taxpayer ID — and now they're not returning texts.

The fix is simple and should become a habit: before you pay any contractor for the first time, ask them to fill out a Form W-9. It's a one-page IRS form the contractor fills out themselves, giving you their legal name (or business name), address, entity type, and Taxpayer Identification Number (usually a Social Security Number or an Employer Identification Number). You keep it on file — you don't send it anywhere. It just sits in your records so that if their total payments for the year cross the reporting threshold, you already have everything you need to file correctly.

Collecting it upfront also protects you if someone turns out to be uncooperative later. It's far easier to ask a contractor to fill out a short form before handing over a check than to chase down a taxpayer ID from someone who has no remaining incentive to respond.

A simple habit that solves most of this: keep a running list of who you've paid and how much, updated as you go rather than reconstructed from memory in January. If a contractor's running total for the year is approaching the reporting threshold, you'll see it coming instead of discovering it during tax prep — the same discipline that makes tracking your own deductible daycare expenses manageable applies here too.

The deadline is tighter than it looks

1099-NEC forms are generally due to both the contractor and the IRS by January 31 following the tax year — for work done in a given calendar year, the form is typically due by the end of January the following year. That's a single date covering both the copy that goes to the contractor and the copy that goes to the IRS, which is tighter than a lot of other tax deadlines people are used to.

January 31 arrives fast, especially layered on top of everything else you're doing in January. It's much easier to hit if you collected W-9s throughout the year rather than trying to track down six people's taxpayer IDs in the same week you're also trying to get your own tax documents together.

There is a real penalty risk for filing late or not at all, and the exact dollar amount of that penalty changes based on how late the filing is and gets adjusted by the IRS periodically — so this article won't put a specific number on it. What's worth knowing in general terms: the penalty scales up the longer a required 1099 goes unfiled, and it applies per form, so multiple missed filings compound quickly. Confirm current penalty amounts with the IRS or a tax preparer if this becomes a live concern.

Where DaycareFlow fits

DaycareFlow doesn't handle 1099 filing, W-9 collection, or contractor payment tracking — it's built around your relationship with the families in your care, not your vendor relationships. What it does give you is a clean, dated record of your own business activity: per-child billing history, attendance records, and a paid/unpaid dashboard that make the income side of your tax picture easier to pull together at year-end. For the contractor side — W-9s, 1099s, payment logs to people you hire — a simple dedicated spreadsheet or a bookkeeper is still the right tool.

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Frequently asked questions

Do I have to send a 1099 to someone I only paid once?

Yes, if that single payment for services meets or exceeds the current reporting threshold and the person is an unincorporated contractor rather than a corporation. The number of separate payments doesn't matter — it's the total amount paid to that person over the calendar year that counts.

What happens if I don't issue a required 1099?

You risk a penalty from the IRS, which increases the longer the filing is missed, plus the contractor may have a harder time reconciling their own tax return without the form. If you've missed a deadline, filing late is still better than not filing at all — talk to a tax preparer about the best way to catch up.

Does my babysitter or substitute need a 1099, or are they my employee?

That depends on how much control you exercise over how and when they work — a question with real legal weight that's separate from the 1099 mechanics covered here. See our guide to independent contractor versus employee status for daycare helpers before you decide how to classify anyone who helps in your daycare.

I already got a 1099 from a parent — is that the same issue as this?

No, that's the reverse direction: a parent's business paying you and reporting it. This article covers you as the payer, issuing a 1099 to someone you hired. If you're the one who received an unexpected or incorrect 1099 from a parent, see what to do if a daycare parent issued you a 1099 incorrectly.

Do I need an EIN to issue 1099s to contractors I hire?

Not necessarily — you can generally file as a sole proprietor using your Social Security Number, though many providers get an Employer Identification Number (EIN) anyway to avoid handing out their SSN to every contractor and client. See our guide to getting an EIN and understanding Form W-10 as a daycare provider for how that works.