Introducing New From
1099-NEC is used by payers to report payments of $600 or more made in the course of a trade or business to others for services. Prior to the creation of this form, these payments were reported in box 7 on Form 1099-MISC. Payers must provide a copy of 1099-NEC to the independent contractor by January 31 of the year following payment.
Characteristics of Nonemployee compensation (NEC)
- The payments made during the year totaled $600 or more.
- The payee was not an employee of the payer.
- The payment was made in the course of a trade or business
- The payment was made to an individual, a partnership, or an estate; or, payment was made to a corporation
Due to the creation of 1099-NEC, IRS revised the Form 1099-Misc and rearranged the box number for reporting certain income.
- 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.
- Nonqualified 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.