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I guess your sub-contractor might be a LLC treated as an S corp for tax purposes. As long as this is ture, then, you do not need to 1099 them. You can check it with the subcontractor.1099s are usually issued to individuals, not to businesses such as an S-Corp/ C-Corp. As you said, as long as your EE, the subcontractor, is an S corp , NOT SMLLC,(disregarded entity)/sole proprietor, you do not 1099them.So, in addition, firms that hire LLCs and pay them more than $600 per year must file Form 1099-MISC with the IRS to report the amount of the payment. (This requirement doesn’t apply if the LLC has opted to be taxed as a S or C-corp.)

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