Payroll
1099-NEC
IRS form used to report payments to non-employee contractors and freelancers.
Form 1099-NEC reports payments of $600 or more made to independent contractors during a calendar year. The form was reintroduced in 2020 to separate non-employee compensation from other 1099 income reported on Form 1099-MISC.
Businesses must file 1099-NECs by January 31 each year, both with the IRS and with the recipient. Penalties apply for late or incorrect filings.
Common pitfalls
- Forgetting to collect a W-9 before paying the contractor — without it, you may owe backup withholding
- Issuing 1099-NEC to entities (S-corps, C-corps) that don't require one (with limited exceptions)
- Misclassifying employees as contractors and issuing 1099-NEC instead of W-2
Related service
Visit relevant service