Key takeaways
- Form 1099-NEC reports nonemployee compensation paid by a business to a person who is not an employee.
- For payments made in 2026 and later, the reporting threshold is USD 2,000. It was USD 600 before.
- The form is due to the recipient and to the IRS by 31 January after the payment year.
- Collect a W-9 before the first payment. If a payee does not give a taxpayer identification number, backup withholding of 24 percent may apply.
Free PDF and Excel: 1099-NEC contractor tracker and January checklist. Get it below
What the form is
Form 1099-NEC is a United States tax information return that a business files to report payments of nonemployee compensation, such as fees to independent contractors, to the IRS and the recipient.
This page describes US practice. It applies to US payers and, in general, to payments to US persons. For payments to foreign persons see W-8BEN. To collect the details you need, see W-9 form.
A business pays a freelance designer a total of USD 3,400 across 2026 and a plumbing firm incorporated as a company USD 5,000. It files a 1099-NEC for the designer. It generally does not file for the corporation, since payments to corporations are mostly exempt from this form.
If the designer had not given a W-9, the business would have had to withhold 24 percent of each payment, or USD 816 on USD 3,400, and report it.
Enter the total paid in the year, the year and the type of payee. The tool shows a simple answer. It does not cover all special cases such as attorney fees or backup withholding.
Basic rules
- Payments for services in the course of your trade or business.
- To an individual, sole proprietor or partnership, and certain others.
- Of USD 2,000 or more in a calendar year for payments made after 31 December 2025. USD 600 or more for earlier years.
- Payments to most corporations are excluded, with exceptions such as legal fees.
- Payments by credit card or payment app are usually reported by the processor on a different form, 1099-K, not by you.
- Deadline: 31 January, to the recipient and to the IRS.
Free PDF and Excel
1099-NEC contractor tracker and January checklist
A tracker that totals payments by contractor and flags who passes the threshold, with a January checklist.
- Contractor tracker
- W-9 check
- January checklist
- Excel tracker with threshold flag
Year-round routine
- Collect a W-9 before the first payment.
- Record payments by payee, by calendar year.
- Review in December who crosses the threshold.
- Check names and taxpayer identification numbers against the W-9.
- File and furnish copies by 31 January.
- Keep records as the IRS requires.
- W-9 on file for every contractor.
- Payments are tagged as nonemployee compensation.
- Payee types are known: individual, partnership or corporation.
- Calendar and owners are set for January.
- Backup withholding rules are understood.
Last checked: 19 October 2026. Based on IRS guidance for Form 1099-NEC and the 2026 threshold change. Confirm against current IRS instructions or with a tax adviser.
Frequently asked questions
What is a 1099-NEC?
A US information return reporting payments to non-employees such as independent contractors.
What is the 1099-NEC threshold?
USD 2,000 for payments made after 31 December 2025. Before that, USD 600.
When is the 1099-NEC due?
31 January of the year after the payments, to both the IRS and the recipient.
Do I send a 1099-NEC to a corporation?
Generally not, but there are exceptions such as attorney fees.
What if a contractor will not give me a W-9?
You may have to apply backup withholding of 24 percent and report it.