The 1099-NEC form is used to report nonemployee compensation, primarily for freelancers and independent contractors. This form ensures that the IRS receives accurate information about payments made to individuals who are not classified as employees. Understanding how to fill out this form correctly is crucial for compliance, so click the button below to get started.
The 1099-NEC form plays a crucial role in the reporting of nonemployee compensation, particularly for freelancers, independent contractors, and other self-employed individuals. Introduced by the IRS in 2020, this form is used to report payments made to nonemployees totaling $600 or more during the calendar year. It replaces the 1099-MISC form for this specific purpose, streamlining the reporting process. The form includes essential information such as the payer's and recipient's taxpayer identification numbers, the amount of nonemployee compensation, and any federal or state taxes withheld. Recipients of the 1099-NEC should be aware that this form serves as a key document for tax reporting, as it indicates income that must be reported on their tax returns. Additionally, it is important to note that while Copy A of the form is scannable and must be filed with the IRS, other copies can be downloaded and printed for recipient distribution. Understanding the nuances of the 1099-NEC is vital for both payers and recipients to ensure compliance with IRS regulations and avoid potential penalties.
Attention:
Copy A of this form is provided for informational purposes only. Copy A appears in red, similar to the official IRS form. The official printed version of Copy A of this IRS form is scannable, but the online version of it, printed from this website, is not. Do not print and file copy A downloaded from this website; a penalty may be imposed for filing with the IRS information return forms that can’t be scanned. See part O in the current General Instructions for Certain Information Returns, available at IRS.gov/Form1099, for more information about penalties.
Please note that Copy B and other copies of this form, which appear in black, may be downloaded and printed and used to satisfy the requirement to provide the information to the recipient.
If you have 10 or more information returns to file, you may be required to file e-file. Go to IRS.gov/InfoReturn for e-file options.
If you have fewer than 10 information returns to file, we strongly encourage you to e-file. If you want to file them on paper, you can place an order for the official IRS information returns, which include a scannable Copy A for filing with the IRS and all other applicable copies of the form, at IRS.gov/EmployerForms. We’ll mail you the forms you request and their instructions, as well as any publications you may order.
See Publications 1141, 1167, and 1179 for more information about printing these forms.
7171
VOID
CORRECTED
PAYER’S name, street address, city or town, state or province, country, ZIP
OMB No. 1545-0116
or foreign postal code, and telephone no.
Form 1099-NEC
Nonemployee
(Rev. April 2025)
Compensation
For calendar year
PAYER’S TIN
RECIPIENT’S TIN
1 Nonemployee compensation
Copy A
$
For Internal Revenue
RECIPIENT’S name
2 Payer made direct sales totaling $5,000 or more of
Service Center
consumer products to recipient for resale
For filing information,
Privacy Act, and
3 Excess golden parachute payments
Paperwork Reduction Act
Street address (including apt. no.)
Notice, see the General
Instructions for Certain
4 Federal income tax withheld
Information Returns.
City or town, state or province, country, and ZIP or foreign postal code
www.irs.gov/Form1099
5 State tax withheld
6 State/Payer’s state no.
7 State income
Account number (see instructions)
2nd TIN not.
Form 1099-NEC (Rev. 4-2025)
Cat. No. 72590N
www.irs.gov/Form1099NEC
Department of the Treasury - Internal Revenue Service
Do Not Cut or Separate Forms on This Page — Do Not Cut or Separate Forms on This Page
Copy 1
For State Tax
Department
CORRECTED (if checked)
Copy B
For Recipient
This is important tax
information and is being
furnished to the IRS. If you are
required to file a return, a
negligence penalty or other
sanction may be imposed on
you if this income is taxable
and the IRS determines that it
has not been reported.
(keep for your records)
Instructions for Recipient
You received this form instead of Form W-2 because the payer did not consider you an employee and did not withhold income tax or social security and Medicare taxes.
If you believe you are an employee and cannot get the payer to correct this form, report the amount shown in box 1 on the line for “Wages, salaries, tips, etc.” of Form 1040, 1040-SR, or 1040-NR. You must also complete Form 8919 and attach it to your return. For more information, see Pub. 1779, Independent Contractor or Employee.
If you are not an employee but the amount in box 1 is not self- employment (SE) income (for example, it is income from a sporadic activity or a hobby), report the amount shown in box 1 on the “Other income” line (on Schedule 1 (Form 1040)).
Recipient’s taxpayer identification number (TIN). For your protection, this form may show only the last four digits of your TIN (social security number (SSN), individual taxpayer identification number (ITIN), adoption taxpayer identification number (ATIN), or employer identification number (EIN)). However, the issuer has reported your complete TIN to the IRS.
Account number. May show an account or other unique number the payer assigned to distinguish your account.
Box 1. Shows nonemployee compensation. If the amount in this box is SE income, report it on Schedule C or F (Form 1040) if a sole proprietor, or on Form 1065 and Schedule K-1 (Form 1065) if a partnership, and the recipient/partner completes Schedule SE (Form 1040).
Note: If you are receiving payments on which no income, social security, and Medicare taxes are withheld, you should make estimated tax payments. See Form 1040-ES (or Form 1040-ES (NR)). Individuals must report these amounts as explained in these box 1 instructions. Corporations, fiduciaries, and partnerships must report these amounts on the appropriate line of their tax returns.
Box 2. If checked, consumer products totaling $5,000 or more were sold to you for resale, on a buy-sell, a deposit-commission, or other basis. Generally, report any income from your sale of these products on Schedule C (Form 1040).
Box 3. Shows your total compensation of excess golden parachute payments subject to a 20% excise tax. See your tax return instructions for where to report.
Box 4. Shows backup withholding. A payer must backup withhold on certain payments if you did not give your TIN to the payer. See Form W-9, Request for Taxpayer Identification Number and Certification, for information on backup withholding. Include this amount on your income tax return as tax withheld.
Boxes 5–7. State income tax withheld reporting boxes.
Future developments. For the latest information about developments related to Form 1099-NEC and its instructions, such as legislation enacted after they were published, go to www.irs.gov/Form1099NEC.
Free File Program. Go to www.irs.gov/FreeFile to see if you qualify for no-cost online federal tax preparation, e-filing, and direct deposit or payment options.
Copy 2
To be filed with
recipient’s state
income tax
return, when
required.
Filling out the 1099-NEC form is a straightforward process. Once completed, you'll need to ensure that you provide the correct copies to both the IRS and the recipient. Follow these steps carefully to avoid any mistakes.
What is the 1099-NEC form used for?
The 1099-NEC form is used to report nonemployee compensation. If you are an independent contractor or freelancer, your clients will issue this form to you if they paid you $600 or more during the year. This form helps the IRS track income that is not reported on a W-2 form, which is typically used for employees.
How do I obtain the 1099-NEC form?
You can download and print copies of the 1099-NEC form for your records. However, if you need to file with the IRS, you must order the official printed version. Visit the IRS website to order these forms, ensuring you receive the scannable Copy A for filing. Remember, do not file the downloaded version with the IRS, as it may lead to penalties.
What should I do if I believe I am an employee but received a 1099-NEC?
If you received a 1099-NEC but believe you should be classified as an employee, you should first discuss this with your payer. If the issue remains unresolved, report the income on your tax return as wages and complete Form 8919. This form helps you report your share of social security and Medicare tax if you were misclassified.
What happens if I don’t report the income shown on my 1099-NEC?
Failing to report the income on your 1099-NEC can lead to penalties from the IRS. If the IRS determines that you did not report taxable income, you may face a negligence penalty or other sanctions. It’s important to include this income on your tax return to avoid any issues.
Completing the 1099-NEC form can be a straightforward process, but many individuals make common mistakes that can lead to complications. One frequent error is failing to use the official printed version of Copy A. It is crucial to obtain this version from the IRS, as using a downloaded copy can result in penalties due to its inability to be scanned.
Another common mistake involves incorrect taxpayer identification numbers (TINs). Both the payer's and recipient's TINs must be accurate. A simple typo can cause significant delays and issues with the IRS. Additionally, some individuals neglect to verify that the recipient's name matches the TIN provided. Discrepancies can lead to confusion and potential penalties.
Many people also overlook the importance of reporting all nonemployee compensation accurately. The total amount reported in Box 1 should reflect the actual payments made. Underreporting or overreporting can trigger audits or penalties. Furthermore, individuals sometimes forget to check Box 2, which indicates if consumer products totaling $5,000 or more were sold to the recipient for resale.
Another mistake involves the failure to include state tax information when applicable. Boxes 5 through 7 must be completed if state income tax was withheld. Omitting this information can lead to complications for both the payer and the recipient. It is also essential to ensure that the correct state identification number is entered in Box 6.
Some individuals mistakenly assume that they do not need to provide a copy of the form to the recipient. It is mandatory to furnish the appropriate copies of the 1099-NEC to the recipient by the specified deadline. Failing to do so can result in penalties for the payer.
Another common oversight is not filing the form on time. The deadline for filing with the IRS and providing copies to recipients is strict. Late filings can incur penalties, so it is vital to keep track of these dates. Additionally, some people may not realize that electronic filing is an option, which can simplify the process and ensure timely submission.
Individuals often forget to keep a copy of the filed 1099-NEC for their records. Retaining a copy is essential in case of inquiries or audits in the future. This documentation serves as proof of compliance with tax obligations.
Lastly, a lack of understanding regarding the purpose of the 1099-NEC can lead to errors. This form is specifically designed for reporting nonemployee compensation, and confusion with other forms, such as the W-2, can lead to incorrect filings. It is important to recognize the distinctions between these forms to avoid complications.
When filing taxes, the 1099-NEC form is often accompanied by several other documents that help provide a comprehensive view of income and tax obligations. Understanding these forms can simplify the process and ensure compliance with tax regulations. Below is a list of common forms that may be used alongside the 1099-NEC.
Each of these forms plays a crucial role in the tax filing process. Properly completing and submitting them alongside the 1099-NEC can help ensure that tax obligations are met accurately and efficiently. Always consider consulting with a tax professional if there are any uncertainties regarding these forms.
The 1099-NEC form is one of several tax documents used to report income. Here are four other forms that are similar in purpose and function:
When filling out the 1099-NEC form, it is crucial to follow specific guidelines to ensure accuracy and compliance. Below is a list of six essential do's and don'ts.
Adhering to these guidelines will help streamline the filing process and avoid potential complications with the IRS.
Understanding the 1099-NEC form is crucial for both payers and recipients. However, several misconceptions can lead to confusion. Here are six common misunderstandings:
This is incorrect. While you can download other copies of the form for recipients, the official Copy A must be ordered from the IRS. Filing a downloaded Copy A can result in penalties.
This is misleading. The 1099-NEC is specifically for nonemployees, such as independent contractors or freelancers. Employees receive a W-2 form instead.
This is not entirely accurate. While many people associate the $600 threshold with 1099 forms, the 1099-NEC must be issued for any nonemployee compensation, regardless of the amount.
This is a simplification. While many recipients may report it as self-employment income, some amounts may come from sporadic activities or hobbies and should be reported differently.
This is incorrect. Recipients must report all income, regardless of whether taxes were withheld. Failing to do so can lead to penalties.
This is misleading. The form can also be used to report payments made to partnerships and certain corporations, depending on the nature of the work performed.
By clarifying these misconceptions, both payers and recipients can navigate their tax obligations more effectively.
Filling out and using the 1099-NEC form can seem daunting, but understanding its key aspects can simplify the process. Here are seven important takeaways to keep in mind:
By keeping these points in mind, you can navigate the 1099-NEC form with greater confidence and ensure compliance with IRS regulations.