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Vendor Payment Factoring: Who Gets the 1099 — the Vendor or the Factor?
September 2, 2026
Q. We have a vendor who is factoring payments to a third party. Do we have an obligation to 1099 the vendor? Who receives the 1099: the vendor or the third party who is receiving the payments?
A.
(Answered by IOFM's third-party tax expert)
Your vendor retains ownership of the payments, meaning you issue the 1099 to the vendor (if one needs to be issued). You do not send a 1099 to the factor.
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