What is the difference between 1099-MISC and 1099-NEC?
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Last modified 9/7/2023 6:05:15 AM EST |
Added by TaxBandits Team
Form 1099-NEC was drafted to specifically report nonemployee compensation, whereas Form 1099-MISC can be used to report other miscellaneous expenses.
It is important to note that Form 1099-NEC is not a replacement for 1099-MISC. Form 1099-NEC is just replacing the use of 1099-MISC for reporting independent contractor payments.
According to the IRS, any combination of the following four conditions qualifies as reportable non-employee compensation:
- Payments made to someone who is not your employee.
- Payments made for services in the course of your trade or business.
- Payments made to an individual, partnership, estate, or, in some cases, a corporation.
- A Payment of $600 or more for the calendar year.
Note: Due to the removal of box seven from 1099-MISC, the IRS has released the revised version of Form 1099-MISC in the name of 1099-NEC.
Every business employing independent contractors should check out TaxBandits, an IRS-certified e-filing service provider that helps you to e-file these forms to the IRS and distribute recipient copies, respectively.