Definition
Form 1099-NEC is the IRS information return a US business files to report payments for services made to an independent contractor or other non-employee during the year. The payer sends one copy to the contractor and one to the IRS. The contractor uses it to report that income on their own tax return.
Also called: 1099-NEC, 1099 form, Nonemployee compensation form
Form 1099-NEC in practice
A business must file Form 1099-NEC for each contractor it paid at least the reporting threshold during the calendar year. For payments made in 2026, that threshold is $2,000 per payee, up from $600 in earlier years, and it is indexed for inflation afterward. Check the current IRS instructions each year.
Payments to corporations are generally exempt, except for certain categories such as legal fees. Payments made by card or through a payment platform are usually reported by the platform on Form 1099-K instead, so the business does not report them again on Form 1099-NEC.
The form is due to contractors and the IRS by January 31 of the following year. To prepare it, businesses collect each contractor's legal name, address, and taxpayer identification number on Form W-9 before the first payment.
Example
A small agency pays a freelance copywriter $14,500 by bank transfer during 2026. By January 31, 2027, the agency files Form 1099-NEC showing $14,500 and sends the copywriter a copy.
Frequently Asked Questions
Do I get a 1099-NEC if I was paid less than the threshold?
Probably not, but the income is still taxable. Report all of your business income from your own invoices and records, whether or not a client sent you a form.
Should my invoices match my 1099-NEC totals?
They should match the payments the client made in the calendar year, which may differ from invoices issued if some were paid in January. Compare your records and ask the client to correct real errors.
What is the difference between 1099-NEC and 1099-K?
Form 1099-NEC is filed by the business that paid you for services. Form 1099-K is filed by card processors and payment platforms for payments processed through them.
Related terms
- Form W-9 Form W-9 is the IRS form a US business asks a contractor or vendor to complete so it has their legal name, business type, address, and taxpayer identification number.
- EIN An EIN, or Employer Identification Number, is a nine-digit number the IRS assigns to a business to identify it for federal tax purposes in the United States.
- Tax ID A tax ID is the number a tax authority assigns to a business for reporting and collecting taxes.
- Withholding tax Withholding tax is an amount a client deducts from an invoice payment and pays directly to the tax authority on the supplier's behalf.
- T4A slip A T4A slip is a Canada Revenue Agency information slip that payers file to report certain income other than employment, including fees paid to contractors and other businesses for services.
- TPAR A TPAR (Taxable Payments Annual Report) is an annual report certain Australian businesses must lodge with the Australian Taxation Office listing payments made to contractors for services.
This page is for general information only and is not legal, tax, or financial advice. Rules change and vary by location, so consult a qualified lawyer or accountant about your situation.