Payee Tally

Payee Tally / Guide

1099 for attorneys: fees at $2,000, settlement proceeds at $600

Attorneys' fees of $2,000 or more paid in your trade or business go in box 1a of Form 1099-NEC, the IRS instructions say. Gross proceeds paid to an attorney, as in a settlement, go in box 10 of Form 1099-MISC at $600 or more. Payments to a law firm that is a corporation still count.

General information, not tax or legal advice. These are sums of what you paste. For your own situation, ask a tax professional.

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Payees at or over the line 0 of 0 payees

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The example, worked

The example's payees are made up. Here is what the sheet shows for them:

  • Hall and Ames Law, fees for the business's legal work: two payments of $1,200 make $2,400, at or over $2,000.
  • Keller Law Group, a settlement paid to the other side's attorney: $950, tagged "Attorney proceeds", at or over $600.
  • Lin Legal, fees: $1,500, under the $2,000 line for fees.

Fees or proceeds

Fees are payments for the attorney's own services. Gross proceeds are payments made to an attorney in connection with legal services, but not for the attorney's services, for example, as in a settlement agreement. In the sheet, tag fees as "Services" and proceeds as "Attorney proceeds".

Law firms that are corporations

The instructions say the exemption from reporting payments made to corporations does not apply to payments for legal services, so a law firm's corporate form doesn't take it off the list.

Questions

Is a $1,500 legal fee over the line?

No. For fees for legal services the line is $2,000 for the year, so $1,500 is under it.

What are gross proceeds paid to an attorney?

Payments made to an attorney in connection with legal services, but not for the attorney's services, for example, as in a settlement agreement. Their line is $600.

Do I report the claimant's attorney's fees?

Generally, you are not required to report the claimant's attorney's fees, the instructions say.

Related guides

Source: the IRS Instructions for Forms 1099-MISC and 1099-NEC (revision for 2026 information), read October 24, 2026.