Form 1099-NEC reports nonemployee compensation: money a business paid to someone who is not its employee, for services, during the year. You send a copy to the recipient and file a copy with the IRS.
Who gets one
Generally an individual, sole proprietor, partnership or single-member LLC that you paid for services in the course of your business. Payments to corporations usually do not need a 1099-NEC, with exceptions such as attorneys’ fees. Payments you made for goods, or personal payments, are not reported this way.
The reporting threshold
For payments made before 2026, a 1099-NEC was required once you paid a person $600 or more in the year. For payments made after 2025 the threshold rises to $2,000. Confirm the current figure in the IRS instructions for the year you are filing.
Collect a W-9 before you pay
Form W-9 gives you the contractor’s legal name, address and taxpayer identification number. Getting it when you first engage someone is far easier than chasing it in January. If a contractor will not provide a taxpayer ID, you may be required to apply backup withholding at 24% to what you pay them.
What is not on a 1099-NEC
Payments made by credit card or through a payment app are generally reported by the processor on Form 1099-K, so you do not report them again on a 1099-NEC.
Deadlines and filing
- Furnish the recipient copy and file with the IRS by January 31 of the year after the payments.
- Penalties apply per form and rise the later a late or incorrect form is filed.
- If you file 10 or more information returns of all types in total, you generally must file them electronically.