1099-NEC (Nonemployee Compensation)

Category: tax

The form used to report payments of $600 or more to independent contractors for services rendered.

The 1099-NEC replaced the 1099-MISC for reporting contract labor. If you pay a web developer or an accountant more than $600 in a year, you must issue them this form so they can report the income on their own tax return.

Common Examples

• We issued a 1099-NEC to our outsourced data firm for the projects completed during the fiscal year.
• Failure to provide the 1099-NEC to our independent contractors by the January 31st deadline results in mandatory IRS non-compliance fines.