🇺🇸 United States

Form 1099-NEC

Freelancer & Contractor Payment Report

Easy ~5 min TaxFreelanceContractor1099

/ What is this form?

Form 1099-NEC is used by businesses to report payments of $600 or more made to freelancers, independent contractors, and other nonemployees during a calendar year. The payer files Copy A with the IRS and sends Copy B to the recipient by January 31.

The recipient uses the 1099-NEC to report income on Schedule C of their Form 1040 and calculate self-employment tax. Even if a contractor doesn't receive a 1099-NEC (e.g., because they earned under $600), they are still legally required to report all income.

Form 1099-NEC was reintroduced in 2020 after being discontinued in 1982. Previously, nonemployee compensation was reported on Form 1099-MISC.

/ Who needs this form?

Businesses that paid $600 or more to a freelancer, contractor, or other nonemployee
Anyone who received payment for services and must report self-employment income

/ What you need before you start

Contractor's completed W-9 form (name, address, SSN or EIN)

Total amount paid to the contractor during the calendar year

Payer's EIN (Employer Identification Number)

Filing deadline: January 31

/ Step-by-step guide

1 Collect W-9 from Contractor

Before paying a contractor, obtain a completed W-9 form with their SSN or EIN, name, and address.

2 Total Annual Payments

Sum all payments made to the contractor during the calendar year. Form is required if total is $600 or more.

3 Complete Form 1099-NEC

Enter the contractor's name, address, TIN (from W-9), and total payments in Box 1.

4 File with IRS

Submit Copy A to the IRS electronically (required if filing 10+ forms) or by mail by January 31.

5 Send to Contractor

Mail Copy B to the contractor by January 31 — they need it to file their tax return.

/ Key fields explained

Field	What to enter	Common mistake
Nonemployee compensation (Box 1)	The total dollar amount paid to the contractor during the calendar year.	Confusing 1099-NEC with 1099-MISC — nonemployee compensation goes on 1099-NEC, not MISC.

/ Common mistakes to avoid

Missing the January 31 deadline — penalties start at $60/form and increase rapidly.

Confusing 1099-NEC with 1099-MISC — use 1099-NEC specifically for nonemployee compensation.

Not collecting W-9s before paying contractors — without a W-9, you may need to withhold backup withholding.

Not filing because you paid in cash — cash payments still require a 1099-NEC if $600+.

/ Frequently asked questions

What if I didn't receive a 1099-NEC?

You must still report the income on your tax return. The $600 threshold is for the payer's obligation to file — you have no such threshold and must report all self-employment income.