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What is Form 1099-NEC?
Form 1099-NEC reports what you paid a contractor for services in the year.
What is Form 1099-NEC?
Form 1099-NEC reports what you paid a contractor for services in the year. You give each contractor a copy and file with the IRS by January 31 when you paid them $2,000 or more, and the IRS instructions say which amount applies each year.
Why does it matter?
A contractor is not on your payroll, so there is no W-2. The 1099-NEC is how you report what you paid them.
It matters that the person really is a contractor: the law looks at the facts, mainly who has the right to control how the work is done.
The key facts
| Fact | What it means |
|---|---|
| Who gets one | A contractor paid $2,000 or more for services in the year. Check the IRS instructions for the amount that applies to the year you are filing. |
| Due | January 31 after the year ends, for the contractor and for the IRS. |
| Collected first | Form W-9 from a US person, or a W-8 form from a foreign person, before the first payment. |
| Tax ID | You can type it once. It is stored encrypted and not shown back to you. |
| Where in StartEase | Reports & forms, 1099-NEC (contractors). |
How does it work in StartEase Payroll?
- Open Contractors and add the person or business with contact details.
- Record their tax form (W-9 or W-8) and type the tax ID once.
- At year end open Reports & forms and choose 1099-NEC (contractors) and the year.
- Give each contractor their copy, file with the IRS, and record it with the date and the confirmation number.
Common mistakes
- Reporting the same person on both a W-2 and a 1099 for the same work. StartEase stops this.
- Paying a contractor without a W-9 or W-8 on file.
- Missing January 31.
Related guides
Form 1099-NEC: paying contractors and the January 31 deadline and Year-end payroll checklist
Sources (government sites)