How to file a 1099-NEC The yearly form for a contractor you paid

What Form 1099-NEC is

Form 1099-NEC reports nonemployee compensation. That is pay for work done by someone who is not your employee. The contractor uses it to report the income. The IRS uses it to check that the income was reported.

It is not a paycheck form. You did not withhold income tax, Social Security, or Medicare from a contractor’s pay, so there is no Form W-2. How to file W-2 forms is the form for employees. If you are not sure which label fits a person, read Independent contractor vs employee first. Calling an employee a contractor does not turn wages into nonemployee compensation.

Who gets a 1099-NEC

The IRS Instructions for Forms 1099-MISC and 1099-NEC (December 2026 revision) list four tests. You file Form 1099-NEC when all four are true.

1. You paid someone who is not your employee.
2. You paid for services in the course of your trade or business. Paying a plumber to fix your own home is not a business payment.
3. You paid an individual, a partnership, or an estate. Some payments to corporations count too, as covered below.
4. You paid that person at least $2,000 in total during the year.

The $2,000 line is new. It used to be $600. The instructions say $2,000 applies to tax years beginning after 2025. So for work paid in 2026, a contractor you paid $1,500 in total does not need a Form 1099-NEC. A contractor you paid $2,400 does.

Add up the whole year for each person. Three invoices of $800 are $2,400, and that crosses the line.

Payments to corporations, and to lawyers

The instructions say payments to a corporation are generally exempt. You usually do not send a Form 1099-NEC to a business that is a corporation.

Lawyers are the main exception. Attorneys’ fees for legal services go in box 1a of Form 1099-NEC even when the law firm is a corporation. The $2,000 test still applies.

You find out whether a payee is a corporation from the Form W-9 they give you. That form is the next step.

Get a Form W-9 before you pay

Form W-9 is the Request for Taxpayer Identification Number and Certification. The contractor fills it out and gives it to you. It tells you the legal name, the tax classification, and the taxpayer identification number, or TIN. A TIN is a Social Security number, an individual taxpayer identification number, or an employer identification number for a business.

The instructions say to use Form W-9 to get the payee’s TIN. Ask for it before the first payment, not in January. People are harder to reach once the job is done.

If a contractor will not give you a TIN, the payment can be subject to backup withholding. The IRS backup withholding page sets the rate at 24 percent. You would hold back 24 percent of the payment and send it to the IRS. The amount you held back goes in box 4 of Form 1099-NEC. A signed Form W-9 on file avoids this in most cases.

Payments that do not go on a 1099-NEC

• Card payments. The instructions say payments you make by credit card or debit card, and certain payments through a third-party payment network, are reported on Form 1099-K by the payment company. Do not also put those on a Form 1099-NEC.
• Wages to an employee. Those go on Form W-2.
• Rent and some other payments. Those go on Form 1099-MISC, a different form covered in the same instructions.
• Personal payments. Work on your own home or for your family is not a business payment.

If you paid one contractor partly by card and partly by check, count only the check payments toward the $2,000.

What goes in the boxes

The form is short. Most small businesses fill in the payer block, the recipient block, and box 1.

Write the TIN the way the instructions show. A Social Security number is XXX-XX-XXXX. An employer identification number is XX-XXXXXXX.

When a 1099-NEC is due

The instructions set January 31 for both jobs. File with the IRS by that date. Give the contractor their copy by that date.

The General Instructions for Certain Information Returns say that when a due date falls on a Saturday, Sunday, or legal holiday, the return is due the next business day. January 31, 2027 is a Sunday. For 2026 payments, the due date is February 1, 2027.

Do not plan on more time. The General Instructions say no automatic extension is available for Form 1099-NEC. You can ask on Form 8809, but the IRS does not grant it just because you asked.

Other Forms 1099 have later IRS dates in March. Form 1099-NEC does not. It shares the early date with Form W-2.

How to file a 1099-NEC online

The IRS has a free filing site called the Information Returns Intake System, or IRIS. These are the steps.

1. Get an IRIS Transmitter Control Code. The IRIS page says you need this five-digit code to use the IRIS Taxpayer Portal. It identifies your business when you file. Apply from that page well before January.
2. Enter the forms, or upload a .csv file. The IRIS page says the portal takes up to 100 returns at a time.
3. Submit, and keep the acknowledgment.
4. Download the payee copies and send each contractor theirs. The IRIS page says you can download payee copies from the portal.

IRIS also takes corrections. Payroll and accounting software often files through IRS systems for you. The General Instructions name a second system, FIRE, which needs software that follows IRS Publication 1220.

When you must file online

The instructions say Treasury Decision 9972 lowered the e-file threshold to 10, and that you count all your information returns together. Forms W-2 count. Every type of Form 1099 counts.

Say you have four employees and you paid seven contractors. That is 4 Forms W-2 and 7 Forms 1099-NEC. Eleven returns is past 10, so all of them go in electronically. A shop with two contractors and no employees can still mail paper.

How to file a 1099-NEC on paper

If you file fewer than 10 returns in all, paper is allowed. The General Instructions say paper returns go with Form 1096, the Annual Summary and Transmittal. Form 1096 is a cover sheet with your totals. The IRS mailing address depends on your state. The General Instructions list it.

Use official paper forms for the IRS copy. The red-ink Copy A is read by machine. You can order forms at IRS.gov/OrderForms.

Keep records, and fix mistakes

The General Instructions say to keep copies of the returns you filed, or be able to rebuild the data, for at least 3 years from the due date. If you did backup withholding, keep them for 4 years.

If you sent a wrong form, file a corrected Form 1099-NEC and send the contractor the corrected copy. IRIS takes corrections. A wrong TIN is the most common fix. A Form W-9 on file is how you avoid it.

What your state may want

A state can want something the IRS does not. Boxes 5 to 7 are there for a state copy. Your state’s tax office says whether it wants one.

A few states also want contractors on a new-hire report. New York notes a new-hire report that can include some contractors. Illinois, New Jersey, Massachusetts, and Ohio also put some people you call contractors on a new-hire report. That report is not the IRS form. Do not use one state’s rule as another state’s rule.

California covers the state account you need once a person is an employee. Texas and Florida take no state income tax off wages, but a contractor still gets the federal Form 1099-NEC.

Doing it yourself, or letting software do it

A business with a handful of contractors can file through IRIS by hand. Payroll software often handles Form 1099-NEC along with Form W-2, on the plans whose help pages say so. Can I do my own payroll? lays out the full year for employees.

The methodology page grades how much state paperwork software takes off your desk. Gusto is one plain link. Patriot is the other service on this site.