Form 1099-NEC

If you pay an independent contractor $2,000 or more in 2026 (indexed for inflation each year), Form 1099-NEC is the IRS form you use to report that payment. It covers a specific category of income — nonemployee compensation — and carries one deadline: January 31. This page defines the form, explains who receives one, and clarifies how it differs from Form 1099-MISC.

If you haven't confirmed your worker's classification yet, start with independent contractor vs. employee before reading further.

Nonemployee compensation: what Form 1099-NEC covers

Form 1099-NEC reports nonemployee compensation — payments made to an independent contractor for services performed in the course of a trade or business. This includes fees, commissions, and payments for professional work.

It does not cover rent, interest, dividends, personal payments, or payments to corporations (with limited exceptions outlined in IRS instructions). If you're unsure whether a specific payment qualifies as nonemployee compensation, the IRS Form 1099-NEC instructions are the definitive reference.

You may also encounter this form in the context of its history: the IRS reactivated Form 1099-NEC in tax year 2020 after reporting nonemployee compensation in Box 7 of Form 1099-MISC for decades. If you've worked with contractors since before 2020, note that nonemployee compensation now has its own dedicated form.

The 2026 filing threshold: $2,000

In 2026, you must file Form 1099-NEC if you paid an independent contractor $2,000 or more during the year.

A few specifics:

• The threshold applies per recipient — not as a combined total across all contractors.
• Once a contractor reaches $2,000, the 1099-NEC reports all payments to that person, not just the amount above the threshold.
• The prior threshold was $600. The 2026 threshold is $2,000.

Starting in 2027, this threshold is indexed for inflation and may change annually. Confirm the current-year figure at IRS.gov before each filing season.

Source: IRS Form 1099-NEC and Instructions.

Who receives a Form 1099-NEC

The contractor receives Form 1099-NEC — any independent contractor you paid at or above the filing threshold for services during the year.

Whether a worker qualifies as an independent contractor is determined by IRS rules, Department of Labor (DOL) and Fair Labor Standards Act (FLSA) standards, and — in many states — an ABC test. Make that determination before you file. Generating a Form 1099-NEC doesn't establish or confirm contractor status. If you're working through the classification question, the common-law employee test explains the framework.

A few categories that do not receive Form 1099-NEC: corporations you paid for services (with limited IRS exceptions), employees (who receive Form W-2), and contractors who fell below the filing threshold during the year. For a side-by-side breakdown, W-2 vs. 1099 covers both forms.

The filing deadline: January 31

Form 1099-NEC carries a single deadline: January 31 of the year following payment.

That date covers both:‍

• Copy A — the copy you file with the IRS
• Copy B — the copy you send to the contractor

Both are due January 31, whether you file electronically or on paper. Most other 1099 forms allow a later deadline for IRS filing. Form 1099-NEC doesn't. Build your year-end process around January 31 as the target date for both.

For more on contractor payment setup, record keeping, and forms, how to pay independent contractors covers the process.

Form 1099-NEC vs. Form 1099-MISC

The two forms cover different types of income and don't overlap.

Form 1099-NEC covers nonemployee compensation only — payments for services performed by independent contractors.

Form 1099-MISC covers miscellaneous income: rent, royalties, medical and health care payments, attorney fees, and other specific items. It does not report contractor payments.

Before 2020, nonemployee compensation appeared in Box 7 of Form 1099-MISC. The IRS separated the two forms to clarify the distinction. If you're paying a contractor, Form 1099-NEC is the form. If you're reporting rent from a business property or royalties, that's Form 1099-MISC.

For contractor payments, Form 1099-NEC is the correct form.

Form 1099-NEC and your year-end workflow

At year end, you review what you paid each contractor during the year. In 2026, anyone you paid $2,000 or more receives a Form 1099-NEC — you file Copy A with the IRS and send Copy B to the contractor, both by January 31.

That review is part of your broader year-end workflow: confirming totals, generating forms, and filing before the first quarter begins. Payroll tools like SurePayroll® By Paychex generate Form 1099-NEC for contractors as part of year-end processing, alongside your regular payroll obligations.

Pay contractors with confidence