Guides
1099-NEC vs 1099-MISC: Which Form Do You File?
File a 1099-NEC when you paid a nonemployee for services (contractor labor, professional fees, commissions). File a 1099-MISC for most other payments: rents, prizes, royalties, medical payments, and gross proceeds to an attorney. The test is simple: services performed for your trade or business go on the NEC; almost everything else goes on the MISC. The two forms also carry different IRS deadlines, and for 2026 payments a new reporting threshold applies.
1099-NEC vs 1099-MISC at a glance
The 1099-NEC reports nonemployee compensation for services, and the 1099-MISC reports miscellaneous income such as rent and royalties. Both are information returns you send to the IRS and to the recipient. The NEC is due to the IRS by January 31; the MISC is due later. Use the table to match a payment type to the correct form and box.
| Feature | Form 1099-NEC | Form 1099-MISC |
|---|---|---|
| Reports | Nonemployee compensation for services | Miscellaneous income (rents, royalties, prizes, etc.) |
| Main box | Box 1 (nonemployee compensation) | Boxes 1-3, 6, 10 and others by category |
| General threshold (2025 payments) | $600 or more | $600 or more |
| General threshold (2026 payments) | $2,000 or more | $2,000 or more |
| Royalties threshold | Not applicable | $10 or more (Box 2) |
| Attorney gross proceeds threshold | Not applicable | $600 or more (Box 10) |
| IRS deadline | January 31 | February 28 (paper) / March 31 (e-file) |
| Recipient copy deadline | January 31 | January 31 (Feb 15 for Box 8 or 10) |
| Backup withholding reported | Box 4 | Box 4 |
What the 1099-NEC reports
The 1099-NEC reports nonemployee compensation: payments of $600 or more (for 2025 payments) to a person who is not your employee for services performed in the course of your trade or business. This covers independent contractors, freelancers, gig workers, professional fee earners, sales commissions, and director fees. The amount goes in Box 1.
The form returned in 2020 after a roughly 38-year absence. Before then, businesses reported contractor pay in Box 7 of the 1099-MISC. The IRS split it back out to enforce the January 31 deadline separately from other 1099-MISC income.
Report a payment on the 1099-NEC when three conditions are met: you paid a nonemployee, the payment was for services, and it was in the course of your trade or business. Personal payments (paying a plumber to fix your home, not your rental) are not reportable. Payments to corporations are generally exempt, though payments to attorneys and certain medical providers are not.
Box 1 also now captures newer subfields under recent instructions, including cash tips (Box 1b) and qualified overtime compensation (Box 1d) tied to provisions taking effect for 2025 and later returns. The core reporting item remains contractor service pay in Box 1a.
What the 1099-MISC reports
The 1099-MISC reports miscellaneous income that is not compensation for services, with each payment type assigned to its own box. Common categories include rents, royalties, other income and prizes, medical and health care payments, and gross proceeds paid to an attorney. Thresholds vary by box, so a $12 royalty is reportable while $500 of rent (for 2026) is not.
| Box | Category | Threshold |
|---|---|---|
| 1 | Rents | $2,000 (2026); $600 (2025) |
| 2 | Royalties | $10 or more |
| 3 | Other income, prizes, awards | $2,000 (2026); $600 (2025) |
| 4 | Federal income tax withheld (backup) | Any amount |
| 5 | Fishing boat proceeds | Any amount |
| 6 | Medical and health care payments | $2,000 (2026); $600 (2025) |
| 8 | Substitute payments (dividends/interest) | $10 or more |
| 10 | Gross proceeds paid to an attorney | $600 or more |
A frequent point of confusion is legal payments. Fees you pay an attorney for legal services go on the 1099-NEC (Box 1). Gross proceeds paid to an attorney, such as a settlement routed through the attorney’s trust account, go on the 1099-MISC (Box 10), which keeps its $600 trigger separate from the general threshold change.
The reporting threshold: $600 vs the new $2,000
For payments made through December 31, 2025, the general 1099-NEC and 1099-MISC threshold is $600. For payments made on or after January 1, 2026, the One Big Beautiful Bill Act (P.L. 119-21) raised the general threshold to $2,000. Beginning in 2027, the $2,000 figure is adjusted annually for inflation, rounded to the nearest $100.
The change matters for what you issue in early 2027 (for 2026 payments), not for the forms you filed in early 2026 covering 2025. A contractor you paid $1,500 in 2025 should have received a 1099-NEC; the same $1,500 paid in 2026 may fall below the new $2,000 floor.
Two thresholds did not move with the general change. Royalties in Box 2 remain reportable at $10 or more, and gross proceeds to an attorney in Box 10 remain reportable at $600 or more. Backup withholding is reportable at any amount once it applies.
State rules can diverge. Some states tie their reporting threshold to the federal figure and will track the annual inflation adjustment, while others may codify a static dollar amount. Confirm the threshold for each state where you have a filing obligation, because a payment below the federal floor can still be reportable to a state.
Deadlines: January 31 for the NEC, later for the MISC
The 1099-NEC is due to both the IRS and the recipient by January 31, whether you file on paper or electronically. The 1099-MISC is due to recipients by January 31 but to the IRS by February 28 on paper or March 31 electronically. When January 31 falls on a weekend, the deadline shifts to the next business day.
The single January 31 deadline for the NEC is the reason the IRS separated it from the MISC. Contractor income drives a large share of underreporting, and an earlier filing date gives the IRS data to match against individual returns sooner.
A timing detail on the MISC: if you report substitute payments in Box 8 or attorney gross proceeds in Box 10, the recipient copy deadline extends to February 15 rather than January 31. All other MISC boxes keep the January 31 recipient deadline.
If you file 10 or more information returns of any type combined in a calendar year, you must file electronically. The 10-return count aggregates across form types (for example, W-2s plus 1099s), not per form. Missing this e-file mandate can trigger penalties even when the forms themselves are correct.
How to decide which form to file
Work through the payment, not the payee. A single vendor can receive both forms if you paid them for services and rented equipment from them. Match each payment to its category, then apply the right threshold and deadline. The steps below resolve most cases.
- Identify whether the payment was for services performed for your trade or business. If yes, and the payee is a nonemployee, use the 1099-NEC (Box 1).
- If the payment was rent, royalty, prize, medical payment, or another listed category, use the 1099-MISC in the matching box.
- Check the threshold for the payment year: $600 for 2025 payments, $2,000 for 2026 payments, with $10 for royalties and $600 for attorney gross proceeds unchanged.
- Confirm the payee is reportable. Payments to corporations are generally exempt, but attorney fees and medical payments to corporations are not.
- Collect a Form W-9 before you pay, so you have the correct name and TIN. A missing or incorrect TIN can require 24% backup withholding, reported in Box 4.
Businesses that misclassify a worker as a contractor face a separate risk: if the IRS reclassifies the worker as an employee, the payment should have run through payroll on a W-2, not a 1099-NEC at all. The form you file does not settle worker status; the facts of the relationship do.
Frequently asked questions
Do I file a 1099-NEC or 1099-MISC for a contractor?
File a 1099-NEC. Payments to an independent contractor or freelancer for services performed in your trade or business belong in Box 1 of the 1099-NEC. Use this form for professional fees, commissions, and other service compensation. The 1099-MISC is for non-service income such as rent, royalties, and prizes, so it does not apply to standard contractor labor.
What is the 1099 filing threshold for 2026?
For payments made on or after January 1, 2026, the general 1099-NEC and 1099-MISC threshold is $2,000, up from $600, under the One Big Beautiful Bill Act. Royalties remain reportable at $10 and attorney gross proceeds at $600. The $2,000 figure adjusts for inflation starting in 2027. The $600 rule still governs 2025 payments reported in early 2026.
When are 1099-NEC and 1099-MISC due?
The 1099-NEC is due to the IRS and the recipient by January 31. The 1099-MISC is due to recipients by January 31 and to the IRS by February 28 on paper or March 31 electronically. If January 31 falls on a weekend, the deadline moves to the next business day. MISC Box 8 and Box 10 recipient copies extend to February 15.
Do I send a 1099 to a corporation?
Generally no. Payments to corporations, including S corporations and C corporations, are usually exempt from 1099 reporting. Two common exceptions apply: payments to attorneys (both fees on the 1099-NEC and gross proceeds on the 1099-MISC) and medical or health care payments to corporations must still be reported. Collect a W-9 to confirm the payee’s entity type before deciding.
Can the same vendor get both a 1099-NEC and a 1099-MISC?
Yes. Report by payment type, not by payee. If you paid a vendor for services and separately paid them rent, the service payment goes on a 1099-NEC (Box 1) and the rent goes on a 1099-MISC (Box 1). Each payment is tested against its own threshold and reported on its own form even when the recipient is the same.
What happens if I file the wrong 1099 form?
Filing the wrong form (for example, reporting contractor pay on a 1099-MISC) can lead to IRS notices, matching errors, and penalties for incorrect information returns. Correct it by filing a corrected return as soon as you find the error. Penalties may be reduced or waived if you show reasonable cause. Filing the right form on time is the cheaper path.
For deeper context on the taxes and forms around contractor and small business income, see our payroll tax report, the small business tax report, and our guide to Form 8949 for reporting capital transactions. If you are choosing how to structure the business behind these payments, compare options in the business entity comparison, and if you need help filing, review CPA vs EA vs tax attorney.
Reviewed by The Ledgerism Editorial Team. Last reviewed: July 2026.