Form 1099-NEC: Nonemployee Compensation - Form 1099 NEC

File a Form 1099-NEC for each person you paid at least $2,000 during the year for services performed by someone who is not your employee, including parts and materials. Attorneys' fees of $2,000 or more go on the same form, even when the attorney is a corporation. You also file for anyone from whom you withheld federal income tax under the backup withholding rules, whatever the amount. Payments to corporations are usually left off, with attorneys' fees and federal executive agency payments for services as the exceptions.

• Wages, bonuses, prizes and awards paid to employees go on Form W-2
• Payments for merchandise, telegrams, telephone, freight, storage and similar items are not reported
• Rent paid to a real estate agent or property manager is not reported by you
• Payments to a tax-exempt organization, the United States, a state, the District of Columbia, a U.S. territory or a foreign government are not reported
• Canceled debt goes on Form 1099-C
• Difficulty-of-care payments excludable from the recipient's income stay off the form

Section 6071(c) sets one date for this form. File it with the IRS on or before January 31, whether you file on paper or electronically. You furnish the recipient copy by January 31 as well, so both halves of the job share a deadline. If that date falls on a Saturday, Sunday or legal holiday in the District of Columbia or where the return is to be filed, the due date moves to the next business day. Leap years do not change it.

If you have 10 or more information returns in the aggregate to file, you may be required to e-file. That count adds up all of your information returns, not only the 1099-NEC ones. The free Information Return Intake System handles e-filing. The threshold came down from 250 to 10 under T.D. 9972, published February 23, 2023, effective for information returns required to be filed on or after January 1, 2024.

Three boxes are new. Box 1b reports cash tips, box 1c reports Treasury Tipped Occupation Codes, and box 1d reports qualified overtime compensation. The payer and recipient address fields were split into separate entry boxes. Excess golden parachute payments moved off Form 1099-MISC and now go in box 3 here. The reporting and backup withholding threshold for certain payments rose to $2,000 for tax years beginning after 2025, and it may be adjusted for inflation beginning in calendar year 2027.

This is a continuous-use revision. Use the December 2026 form and its instructions to report 2026 amounts, with the first filings reaching the IRS in early 2027, and keep using them for later years until a superseding revision appears. Do not use them for prior years. The IRS puts these forms out roughly a year early so you know at the start of a year what information you need to collect during it.

Box 1a carries total nonemployee compensation of $2,000 or more. Fees, commissions, prizes and awards for services performed as a nonemployee, oil and gas payments for a working interest, and taxable fringe benefits for nonemployees all belong there. Boxes 1b and 1d hold amounts already included inside box 1a, so filling them in does not add to the total. Box 2 is a checkbox for direct sales of $5,000 or more of consumer products for resale, with no dollar amount. Box 4 is backup withholding.

Enter the 4-digit calendar year in the 'For calendar year' space. Put the recipient's TIN in with hyphens, using XXX-XX-XXXX for an SSN, ITIN or ATIN and XX-XXXXXXX for an EIN. On payee statements you may truncate the recipient's TIN, but not on anything you file with the IRS, and a payer's TIN is never truncated. Boxes 5 through 7 are there for your convenience and hold state information for up to two states.

Copy A goes to the IRS. In the PDF it appears in red and is not scannable, so do not print that copy and mail it in. The IRS may impose a penalty for filing information return forms it cannot scan. Official printed forms with a scannable Copy A can be ordered instead, and the order limit for most information returns is 10 because of the e-file rule. Copies 1, B and 2 appear in black and have been made fillable online.

• Copy A: Internal Revenue Service Center
• Copy 1: your state tax department, if it requires a paper copy
• Copy B: the person you paid, to keep for their records
• Copy 2: the person you paid, to file with their state income tax return

You got this form instead of a Form W-2 because the payer did not consider you an employee and withheld no income tax, social security tax or Medicare tax. If the box 1a amount is self-employment income, the instructions point a sole proprietor to Schedule C or F (Form 1040) and a partnership to Form 1065 and Schedule K-1 (Form 1065), with the recipient or partner completing Schedule SE (Form 1040). Income from a sporadic activity or a hobby goes on the 'Other income' line of Schedule 1 (Form 1040).

If you believe you are an employee and cannot get the payer to correct the form, the instructions say to report the box 1 amount on the 'Wages, salaries, tips, etc.' line of Form 1040, 1040-SR or 1040-NR and attach Form 8919. Use box 1b and box 1c for the qualified tip deduction in Part II of Schedule 1-A (Form 1040), and box 1d for the overtime deduction in Part III. If code 000 is the only code in box 1c, your cash tips are not qualified tips.