Form 1099-NEC Online | eFile 1099-NEC - Report non-employee compensation

What is IRS form 1099-NEC?


The IRS is introducing a new Form 1099-NEC to report non-employee compensation, beginning with the tax year 2020. Indeed, form 1099-NEC isn't a completely new form, it's a revived old form which hasn’t been used in over 30 years. The new 1099 NEC form replaces Form 1099-MISC Box 7 for reporting nonemployee compensation.

With Form 1099-NEC, IRS accelerated the due date for filing Form 1099 that includes non-employee compensation (NEC) from February 28 to January 31 and eliminated the automatic 30-day extension for forms that include NEC.

When would you need to file a 1099-NEC?

Use Form 1099-NEC only when payments ($600 or more) are made to an individual who is not your employee in the course of your trade or business. Personal payments are not reportable.

If the following four conditions are met, you must generally report a payment as NEC.

  • You made the payment to someone who is not your employee.
  • You made the payment for services in the course of your trade or business (including government agencies and nonprofit organizations).
  • You made the payment to an individual, partnership, estate, or, in some cases, a corporation.
  • You made payments to the payee of at least $600 during the year.

Who must file Form 1099-NEC?

  • You are engaged in a trade or business if you operate for gain or profit. However, nonprofit organizations are considered to be engaged in a trade or business and are subject to these reporting requirements.
  • Other organizations subject to these reporting requirements include trusts of a qualified pension or profit-sharing plans of employers, certain organizations exempt from tax under section 501(c) or 501(d), farmers' cooperatives that are exempt from tax under section 521, and widely held fixed investment trusts.
  • Payments by federal, state, or local government agencies are also reportable.

What are the Fields and Boxes of Form 1099-NEC?


Form 1099-NEC has Payers information, Receivers information and three boxes to report nonemployee compensation, Federal Tax withheld and State information to the IRS. Payer’s information: Name, Address, and TIN Receiver’s information: Name, Address, and TIN

Box 1 - Nonemployee Compensation

Use this box to enter nonemployee compensation (NEC) of $600 or more. For example, a fee paid to a nonemployee, including an independent contractor, or travel reimbursement for which the nonemployee did not account to the payer, if the fee and reimbursement total was at least $600.

Box 2 - Reserved.

Box 3 - Reserved.

Box 4 - Federal Income Tax Withheld

Use this box to enter backup withholding information. For example, persons (payees) who have not furnished their TINs to payers are subject to withholding on payments required to be reported in box 1. A payer must backup withhold on certain payments if the payee did not give their TIN to the payer.

  • Professional service fees, such as fees to attorneys (including corporations), accountants, architects, contractors, engineers, etc.

  • Fees paid by one professional to another, such as fee-splitting or referral fees.
  • Payments by attorneys to witnesses or experts in legal adjudication.
  • Boxes 5 - 7 - State Information

  • Use these boxes provided for your convenience only and do not need to be completed for the IRS.
  • If you withheld state income tax on this payment, you may enter it in box 5. In box 6, enter the abbreviated name of the state and the payer's state identification number. In box 7, you may enter the amount of the state payment.

What are the Form 1099-NEC Filing Requirements?

File Form 1099-NEC, Non-employee Compensation (NEC), for each person in the course of your business to whom you have paid the following during the year:


  • At least $600 in:
  • Services performed by someone who is not your employee (including parts and materials) (box 1);
  • Cash payments for fish (or other aquatic life) you purchase from anyone engaged in the trade or business of catching fish (box 1); or
  • Payments to an attorney (box 1).

You must also file Form 1099-NEC for each person from whom you have withheld any federal income tax (report in box 4) under the backup withholding rules regardless of the amount of the payment.

Be sure to report each payment in the proper box because the IRS uses this information to determine whether the recipient has properly reported the payment.

What is the due date for Form 1099-NEC?

The deadline for reporting nonemployee compensation on Box 7 of Form 1099-MISC is January 31st, but to report other types of income, the due date would be February 28 or March 31. There is a lot of confusion around Form 1099-MISC Box 7 nonemployee compensation and other types of income.

To get rid of this confusion the IRS revived an old form 1099-NEC that hasn’t been in use since 1982. Form 1099-NEC is still in draft mode, the IRS needs to clarify on the filing requirements, due dates.

What are the changes in Form 1099-MISC due to the Form 1099-NEC?

Redesigned Form 1099-MISC due to the creation of Form 1099-NEC, IRS revised Form 1099-MISC and rearranged box numbers for reporting certain income.

Changes in the reporting of income and the 1099-MISC form’s box numbers are listed below.

  • Payer made direct sales of $5,000 or more (checkbox) in box 7.
  • Crop insurance proceeds are reported in box 9.
  • Gross proceeds to an attorney are reported in box 10.
  • Section 409A deferrals are reported in box 12.
  • Non-qualified deferred compensation income is reported in box 14.
  • Boxes 15, 16, and 17 report state taxes withheld, state identification number, and amount of income earned in the state, respectively.

How to report Form 1099-NEC to the IRS?

You can easily eFile Form 1099-NEC to the IRS using our award winning platform Tax1099.com.

  • Create your free account
  • Login to your account dashboard
  • Locate Form 1099-NEC on the dashboard
  • Enter your details about the 1099-NEC form
  • Verify & Submit Form 1099 NEC to the IRS