How To Set Up A 1099 Contractor In QuickBooks Desktop Or Online?

Posted by Harry

Finance & Investment

Jul 7, 2025

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QuickBooks allows you to set up a 1099 contractor as a vendor. Moreover, QB simplifies the process by storing important information and keeping track of payments. Therefore, when filing 1099 forms for your contractor, you’ll already have the required information. Today, we are going to discuss how to set up 1099 contractors in QuickBooks Desktop or Online. Also, we will learn how to track contractor payments for the 1099s.

For faster resolution of your QB query, contact our QB ProAdvisors at +1-(855)-955-1942. These professionals are QuickBooks experts and are available to resolve your issue.

Learn How To Set Up 1099 Contractor In Quickbooks Online Or Desktop

Before we dig into how to set up 1099 contractor in QuickBooks Online or Desktop, get your contractors to complete a W-9. This essentially speeds up the process and provides all the information you need for quickbooks 1099 filing.

Setting Up A 1099 Contractor In QuickBooks Online

To begin with, you need to add a contractor as a vendor. Therefore, if you haven’t added your contractors as a vendor in QuickBooks, here’s how to do it.

Open QuickBooks and click on Payroll.
Now, select Contractors
Click on Add a contractor
Now, fill in the information for the contractor, including the email, etc.
When done, click on Add Contractor to finish.

After you have added the contractors as vendors in QuickBooks, let’s proceed to the section of setting up a 1099 contractor. You need to start keeping track of the contractor’s payments now.

Open QuickBooks and navigate to Sales or Get Paid and pay
Click on vendors
Now, select the vendor you would like to track
Open the profile of the vendor and click on edit.
Check the box next to the option that says track payments for 1099.

Now QuickBooks will keep track of all payments for that vendor automatically. You can readily use this information when you are ready to file the 1099 form.

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Setting Up A 1099 Contractor In QuickBooks Desktop

For setting up a 1099 contractor in QuickBooks Desktop, you need to enable the features that track information.

Here’s how to turn on the 1099-MISC feature:

Go to the edit menu. Now, click on the preferences
Select the menu for tax: 1099
Click on the company preferences tab
When asked if you file 1099-Misc forms, answer yes
Save the settings and confirm with ok.

Once done, move on to the next step of adding the contractor as a vendor

Go to the Vendors menu and choose the Vendor center
Now, click on the new vendor in the dropdown menu
Review the tab information and check if they are filled up.
Once done, click on Ok.

Now, you need to start tracking contractor payments for 1099 to have all the information you need.

Go to the Vendor menu and click on Vendor center
Choose the vendor and click on edit
Review the information there, and edit if needed
Go to the tax setting section and check the option for vendor eligible for 1099
Enter the identification number of the vendor in the vendor tax field
Once done, click on Ok.

Talk To An Expert?

Now you have a good understanding of how to set up a 1099 contractor in QuickBooks Online or Desktop. However, if you have a query or get stuck in a step above, you can contact our QB ProAdvisors at +1-(855)-955-1942.

Here are some important Q/A Set Up A 1099 Contractor.

Q1: How do I set up a 1099 contractor in QuickBooks Online?
A: Go to “Payroll,” select “Contractors,” then click “Add a Contractor.” Enter their name, email, and tax ID. Send a W-9 request directly from QuickBooks.

Q2: Can I pay a 1099 contractor through direct deposit in QuickBooks?
A: Yes, QuickBooks allows you to pay 1099 contractors via direct deposit if you have an active payroll subscription.

Q3: What information is required to set up a 1099 contractor?
A: You’ll need the contractor’s full name, mailing address, email, and their completed W-9 form (which includes their SSN or EIN).

Q4: Do I need to collect a W-9 before paying a contractor?
A: Absolutely. Always collect a signed W-9 before issuing payments to ensure proper 1099 reporting at year-end.

Q5: How do I know if someone qualifies as a 1099 contractor?
A: If they control how and when they work, use their own tools, and are not on your payroll—they’re likely a 1099 contractor.

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Q6: Can I send Form 1099-NEC through QuickBooks?
A: Yes, QuickBooks allows you to electronically file and send Form 1099-NEC to the IRS and your contractors.

Q7: What if I forgot to mark a vendor as a 1099 contractor?
A: Go to the vendor’s profile, edit settings, and check the box “Track payments for 1099.” Update their tax info if needed.

Q8: Do I need to issue a 1099 if I paid a contractor less than $600?
A: No, you’re only required to issue a 1099-NEC if payments total $600 or more in a calendar yea

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