1099 data licensing: which IRS form applies
The short answer
For 1099 data licensing, the IRS splits royalty payments at $10 or more into Form 1099-MISC box 2. Other payments go to 1099-NEC box 1a (services, $2,000+) or 1099-MISC box 3 (other income, $2,000+). Ask the buyer in writing which form it will issue.
A 1099 is the payer's report to the IRS and to you. The IRS instructions spell out who files which form and when, and it reads drier than you'd hope.
Who files a 1099?
Only payments made in the course of a trade or business are reportable.
The IRS instructions say personal payments are not, and that nonprofit organizations count as engaged in a trade or business. If someone pays you privately, outside any business, they don't file.
Which box covers which payment?
- 1099-MISC box 2, royalties. Gross royalties of $10 or more. The instructions say to use box 2 for royalty payments from intangible property such as patents, copyrights, trade names and trademarks.
- 1099-NEC box 1a, nonemployee compensation. $2,000 or more for services in the course of the payer's business, including fees and commissions.
- 1099-MISC box 3, other income. Other income of $2,000 or more that isn't reportable in another box.
For tax years beginning after 2025, the instructions say the threshold for certain information returns and backup withholding rose to $2,000, and may be adjusted for inflation starting in calendar year 2027.
The $10 royalty threshold is unchanged in the text I read.
Do payments to a company get a 1099?
Payments to a corporation, including an LLC treated as a C or S corporation, generally don't need a Form 1099-MISC. The instructions also list payments to corporations that are reportable, attorneys' fees among them, so the payer has to check that list.
When are 1099 forms due?
Form 1099-NEC is due to the recipient and the IRS by January 31. Form 1099-MISC is due to the IRS by February 28 on paper or March 31 electronically.
What do the companies say about 1099s?
Troveo, micro1 and the other company pages I read don't say which form they issue for a data payout, or whether they issue one. My income page covers whether the income is taxable.
Here's what I'd do: ask any payer in writing which form it will issue and what taxpayer information it needs. That's Form W-9 for a US company and a Form W-8 for a foreign one.
Talk to a tax professional about your own situation.
Vaultfish helps you run the process. We are not lawyers and this is not legal advice. If you need counsel who knows this area, we can point you to one. Ask for a referral
