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Have You Heard About The 1099-NEC? 

Have You Heard About the 1099-NEC? 

Well, the IRS has! Everything old is New Again. The 1099-NEC was last used in 1982, and the IRS revived it in 2020.

The IRS has taken Non-Employee Compensation out of the 1099-MISC and reintroduced the form 1099-NEC. The 1099-NEC is to be used only for reporting independent contractor payments of $600 or more in the course of trade or business. You are still required to use the 1099-MISC for such items as royalties, rent, and healthcare payments.

In addition to nonemployee compensation, there are some other payments reported in box 1 of Form 1099-NEC.

  • Prizes and awards for services performed by nonemployees
  • Cash payments for fish
  • Payments by a federal executive agency for services
  • Gross oil and gas payments for a working interest
  • Taxable fringe benefits for nonemployees

To be clear, you will need to use both forms if you have made NEC contractor payments AND royalties, rent and/or healthcare payments during the year.

Sounds complicated? Let our experts handle it for you. Just ask your bookkeeper for help.

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