Expert: Arthur Naman - 10/6/2008

Question
If I issue 1099 MISC to contractors , as an employer do I need to file 941, 940 and State withholding for the 1099s?

Answer
The payroll forms 941, 940, and the state equivalents are required for employees, not independent contractors.

If you issue 1099-MISC to contractors, those are reported to the IRS along with a transmittal form 1096.

If you have no employees, you do not need to file the payroll forms, 941, 940, etc.  If you pay independent contractors, you need to give them a form 1099 and send those form 1099's to the IRS along with the above mentioned transmittal form 1096.