1099-NEC vs. 1099-MISC: Which One Do You Use?
Use Form 1099-NEC to report nonemployee compensation (like freelancers and contractors). Alternatively, use Form 1099-MISC for other types of payments: rent, prizes, royalties, and more.
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They Look Alike, But They’re For Different Things
These two IRS forms often confuse business owners, and for good reason. That’s because both forms report payments made to people who aren’t on your payroll. However, they serve distinct purposes.
1099-NEC: For Contractors and Freelancers
This one’s all about nonemployee compensation. Use it if you paid $600 or more in a year to someone who’s not an employee; like a designer, consultant, or gig worker.
Examples:
- Freelance web developer you paid $1,200
- Social media manager you hired for a few months
- Independent plumber for a one-time repair
1099-MISC: For Everything Else
This form, however, covers miscellaneous income; the stuff that doesn’t count as regular contract work.
Examples:
- Rent payments to a landlord
- Prizes or awards
- Royalties over $10
- Payments to attorneys (in certain cases)
Who Gets What
| Payment Type | Form | Recipient |
|---|---|---|
| Contractor/freelancer services | 1099-NEC | The contractor |
| Rent payments | 1099-MISC | Landlord |
| Prizes and awards | 1099-MISC | Winner |
| Royalties ($10+) | 1099-MISC | Rights holder |
| Attorney fees | 1099-NEC: for legal services 1099-MISC: for gross proceeds paid to attorneys | Attorney/law firm |
Filing Deadlines
1099-NEC: January 31st (to the IRS and to recipients)
1099-MISC: February 28th if paper filing, March 31st if e-filing
If you missed those dates expect penalties. File early to stay safe.
Quick How-To: Filing the Correct 1099
1) Check your records. See who got paid $600+ during the year.
2) Classify correctly. Was it for work (NEC) or something else (MISC)?
3) Fill out the form. Include payer, recipient, and amount info.
4) Send copies.
- To the recipient
- To the IRS
- (And sometimes to your state)
Stay Compliant — Without the Stress
Filing the right 1099 doesn’t have to be confusing. Whether it’s for a contractor, landlord, or prize winner, knowing when to use 1099-NEC vs. 1099-MISC keeps your business IRS-ready and penalty-free. Skip the manual forms and let FormPros do the work. With our generator, you can create and e-file both Form 1099-NEC and 1099-MISC in minutes, no guesswork, no IRS headaches.
FAQs
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What if I paid through PayPal or Venmo?
Keep in mind that if you used a payment platform, they may issue a 1099-K instead. As a result, always check before filing.
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Do individuals ever file 1099s?
Typically not. In fact, businesses, not individuals, are responsible for issuing them.
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Do I need to issue a 1099 to an LLC?
Generally yes, unless the LLC is taxed as an S-Corp or C-Corp. In that case, you typically don't need to issue a 1099.
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Can I file both forms for the same person?
Yes, if they received different types of payments (e.g., contractor work + rent).
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What happens if I file the wrong form?
The IRS can send corrections requests or charge small penalties. File an amended form if needed.
