TaxBandits Knowledge Base

What is Form 1099-NEC?

Form 1099-NEC is used to report payments (of at least $600 or more) made to nonemployees during the tax year. The payments reported include:

• Fees
• Rent
• Royalties
• Commissions
• Prizes
• Awards
• Other forms of compensation for services related to your trade or business.

Until 2019, payers used Form 1099-MISC to report miscellaneous payments made to contractors, including nonemployee compensation in Box 7. However, at the beginning of 2020, the IRS announced that non-employee compensation would be reported in a separate form, the 1099-NEC.

The main purpose of introducing Form 1099-NEC was to eliminate the confusion caused by having two deadlines for Form 1099-MISC.

If you need to file nonemployee compensation for prior years, you should use Form 1099-MISC to report payments to independent contractors.

With TaxBandits, payers can easily file Form 1099-NEC for the current tax year in just a few minutes. They can also furnish copies of the form to contractors via email or postal mail with just the click of a button.

Payers can now use TaxBandits' new scheduling feature to file Form 1099-NEC and 1099-MISC on a future date. This feature allows you to revise the form freely without penalty as long as the scheduled date is on or before the IRS deadline.