Report what you paid your contractors.
When your business pays an independent contractor or freelancer for their work, you report it to the IRS on Form 1099-NEC, and you send the contractor a copy so they can report the same income. It covers people who are not on your payroll. A recent law raised the amount that triggers it, so fewer small payments now need a form. We track who crossed the threshold and file for each one.
The contractor's version of a W-2.
Form 1099-NEC reports nonemployee compensation: the money your business paid to people who worked for you but were not employees, such as freelancers, independent contractors, and outside professionals. It does the same job for a contractor that a W-2 does for an employee, with one big difference. You did not withhold tax from a contractor's pay, so the form simply tells the IRS what you paid and tells the contractor to report it. You send one copy to the IRS and one to the contractor. If you also paid someone rent, royalties, or other kinds of income, that goes on a different form, the 1099-MISC; the NEC is specifically for paying people for their services.
One statement per contractor, to two places.
Each contractor who crossed the threshold gets their own 1099-NEC, and each one travels to both the IRS and the contractor.
- Form 1099-NEC, one per contractor. The total you paid each nonemployee for services during the year, in Box 1.
- Copy A for the IRS. Transmitted electronically, with the Form 1096 summary when a paper filing is used instead.
- Copy B for the contractor. Sent to each contractor so they can report the income on their own return.
- A matched, filed record. Each form tied back to the contractor's W-9 and confirmed as accepted, kept with your books.
For the people you paid to do work.
A 1099-NEC is triggered by paying a nonemployee for services in the course of your business, above the threshold. Several common payments look like they should get one but do not.
- Independent contractors and freelancers you paid at or above the threshold for services
- Outside professionals such as designers, writers, developers, and consultants
- Attorneys your business paid for legal services, in most cases
- A person or unincorporated business you hired to do work for your company
- Your own employees, who get a Form W-2 instead
- Contractors you paid below the reporting threshold for the year
- Most payments to a corporation, with limited exceptions such as legal fees
- Rent, royalties, or other income, which belong on a Form 1099-MISC
- Payments made by credit card or a payment app, which the processor reports instead
Collect a Form W-9 from every contractor before you pay them. It gives you the exact name and taxpayer number you will need to file, long before the January rush.
A higher threshold, the same firm deadline.
These figures are verified against current IRS guidance and the law that changed the threshold. The reporting amount went up, but the January 31 deadline to both the IRS and the contractor did not move, and unlike some forms there is no automatic extension.
The threshold and the penalty amounts are adjusted for inflation. We confirm the current figures before every filing season.
From payments to filed forms.
- 1Total each contractor for the year
We add up what you paid every nonemployee and flag the ones who crossed the reporting threshold.
- 2Match to the W-9 on file
Each form is built from the contractor's W-9, so the name and taxpayer number are exactly what the IRS expects.
- 3File with the IRS and send Copy B
We e-file the IRS copy and deliver each contractor their statement by the January deadline.
- 4Confirm and keep the record
You get confirmation each form was accepted, filed with your books for the year.
The name and number have to match.
A 1099 with a name and taxpayer number that do not match IRS records draws a notice and can lead to backup withholding. We build every form from the W-9 you collected, so the details line up the first time.
Each form uses the contractor's own reported name and taxpayer number, so the IRS match holds.
We flag your due date early and deliver both the IRS copy and the contractor copy on time.
We apply the current threshold so you do not file for contractors who fall below it.
You see the price per form before you file, with no surprise add-ons. See pricing →
Before and around the 1099.
Get each contractor's name and taxpayer number before you pay them.
Explore → For employeesForm W-2The year-end statement for the people who are on your payroll.
Explore → Which one applies1099-NEC vs W-2Tell an independent contractor from an employee before you file.
Explore → Never miss a dateCompliance calendarEvery payroll and tax deadline for your business in one place.
Explore →Form 1099-NEC, answered.
How much do I have to pay a contractor before I file?
For payments made in 2026 and later, the threshold is 2,000 dollars to a single nonemployee for the year. It was 600 dollars for earlier years and was raised by a 2025 law, with inflation adjustments to follow. If you paid a contractor less than the threshold, no form is required, though the contractor still owes tax on the income.
What is the difference between the 1099-NEC and the 1099-MISC?
The 1099-NEC reports paying a nonemployee for services, meaning work. The 1099-MISC reports other kinds of payments such as rent, prizes, and royalties. Since 2020 the NEC has its own form separate from the MISC.
When is the 1099-NEC due?
January 31, to both the IRS and the contractor. When the 31st lands on a weekend, the deadline moves to the next business day. There is no automatic extension, so it pays to have your W-9s in hand early.
Do I file one for a contractor set up as a corporation?
Usually no. Payments to a corporation are generally exempt from 1099-NEC reporting. The most common exception is payments to an attorney for legal services, which are reported even when the firm is incorporated. Workers on your payroll get a Form W-2 instead; see W-2 vs 1099-NEC. The contractor's W-9 tells you how they are set up.
What if I do not have the contractor's taxpayer number?
You need it to file a correct form, which is why the Form W-9 comes first. If a contractor will not provide one, backup withholding rules can apply. We flag any contractor missing a W-9 well before the deadline.