Are people supposed to get a 1099 for their per diem if they were working out of state? Are they supposed to fill out a W-9 for per diem if they are paid as an employee on a W-4 as well?

Form W-9 is used for the person to provide his name, address and SSN to whomever needs it for tax filing purposes, usually the 1099.

Per diem can be reported on Form 1099, or on Form W-2, whichever the company decides.

If they report it on Form 1099 as "non-employee compensation", file Schedule C and claim the per diem expense (as specified in IRS Pub 1542) to offset the per diem reimbursement. I know it's a pain, but that is the BEST way to handle it.

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Originally Posted by AtlantaTaxExpert

Form W-9 is used for the person to provide his name, address and SSN to whomever needs it for tax filing purposes, usually the 1099.

Per diem can be reported on Form 1099, or on Form W-2, whichever the company decides.

If they report it on Form 1099 as "non-employee compensation", file Schedule C and claim the per diem expense (as specified in IRS Pub 1542) to offset the per diem reimbursement. I know it's a pain, but that is the BEST way to handle it.

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If the per diem is included in box 7,form 1099, and there is no distinction from hourly wages, what should be reported on schedule C? The IRS allowence or.. I am confused.

You report the figure in Box #7 as income on the schedule C.

You then use the rates in IRS Pub 1542 to offset the income against meals, incidental expenses, and lodging.