Form 1099-NEC, for people who pay contractors

What Form 1099-NEC is

Form 1099-NEC reports nonemployee compensation. It is the form a business generally uses to tell a contractor, and the IRS, how much it paid that person for services during the year.

Who generally needs to file one

If you pay someone who is not your employee for services in your business, you generally look at Form 1099-NEC. Employees are different: their pay is handled through payroll. Some payments do not go on a 1099-NEC you prepare, including many payments to corporations and payments a card processor or app already reports. Check with your tax preparer for your contractors.

The reporting threshold

For payments made in 2026, the IRS generally raised the Form 1099-NEC reporting threshold from $600 to $2,000. Years after 2026 may be adjusted for inflation, so the dollar amount is not frozen. If federal income tax was withheld, a form is generally required no matter the amount. This is a general rule with exceptions. Check with your tax preparer before you decide whether a form is required.

Source: IRS, “Am I required to file a Form 1099 or other information return?”

The late-January deadline

You generally send Form 1099-NEC to the contractor and file it with the IRS by January 31 of the following year. That is a late-January deadline. Confirm the date for your filing year with your tax preparer.

Keep W-9s on file

Ask each contractor for a Form W-9 before you pay them, and keep it on file. It has the legal name and taxpayer identification number that go on the 1099-NEC. Collecting it at the start is much easier than chasing it in January.

How SteadyBooks helps

I prepare 1099-NEC forms from your bookkeeping records. 1099 preparation is $75 plus $15 per form. If you pay employees, payroll support is separate from 1099 preparation.

SteadyBooks provides bookkeeping only. Tax filing and tax advice are not included. I do not decide what you owe or file your tax return.