Form 1099-NEC
Form 1099-NEC is the IRS information return you file to report nonemployee compensation: payments for services to an independent contractor or other nonemployee.
- FORM
- Form 1099-NEC, Nonemployee Compensation
- WHO FILES
- Businesses paying a nonemployee $2,000 (2026) or more
- NO FORM?
- Under $2,000 (2026), unless backup withholding applied
- WATCH FOR
- Treating an employee as a contractor
Next due dates
- W-2s and 1099-NEC to workers, SSA and IRS
Moved to the next business day when the date falls on a weekend or bank holiday. See the full compliance calendar
You file one for each nonemployee paid at least $2,000 in 2026 for services in your trade or business. The threshold was $600 through 2025 and may be adjusted for inflation beginning in 2027. The form reports the year’s nonemployee compensation and any backup withholdingBackup withholding. Backup withholding is the flat 24 percent a payer must withhold from certain payments, such as Form 1099-NEC nonemployee compensation, when the IRS requires it.Click to open the term taken from it. Wages, bonuses, prizes, and awards you pay employees go on Form W-2Form W-2. Form W-2 is the annual wage and tax statement you give employees and file with the Social Security Administration, reporting wages paid and taxes withheld.Click to open the term instead. Contractors use the totals to figure their own income and self-employment tax.
What goes on Form 1099-NEC?
A payment is generally nonemployee compensation when four conditions are met. You paid someone who is not your employee, for services in your trade or business. The payee is an individual, partnership, estate, or in some cases a corporation. Payments reach at least $2,000 for the year.
- Professional service fees, such as to accountants, architects, contractors, and engineers
- Attorneys’ fees paid in the course of your business
- Fees one professional pays another, such as referral fees
- Commissions to nonemployee salespersons subject to repayment but not repaid during the year
- Directors’ fees, including payments after retirement
- Services, including parts or materials incidental to the service
- Wages, bonuses, prizes, and awards paid to employees (Form W-2)
- Employee business expense reimbursements
- Payments for merchandise, freight, storage, and similar items
- Card and third-party network payments, reported on Form 1099-K by the payment settlement entity
- Rents and royalties, reported on Form 1099-MISC
- Payments to tax-exempt organizations, the United States, or a state
When is Form 1099-NEC due?
You furnish the contractor’s copy and file with the IRS by the same date, on paper or electronically. You must e-file once you file 10 or more information returns in total for the year.
- January 31Due to the contractor and the IRS, for the prior year’s payments.
- Next business dayWhen January 31 falls on a weekend or legal holiday, the due date moves to the next business day.
- February 28Form 1099-MISC paper filing with the IRS (March 31 if e-filed), or the next business day.
- Penalty deadline: August 1Filing after it raises the penalty per return from $130 to $340 (2025 forms).
Frequently asked
- About Form 1099-NEC, Nonemployee Compensation
- Instructions for Forms 1099-MISC and 1099-NEC (12/2026)
- General Instructions for Certain Information Returns (2025)
- 26 U.S.C. §6041, Information at source
General information, not legal or tax advice. Apply current federal and state rules with qualified guidance.