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What is Form 1099-NEC, and when is it due

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Summary

What is Form 1099-NEC in Sage 100 Contractor, and what is the filing deadline?

Description

What is Form 1099-NEC?

Form 1099-NEC reports nonemployee compensation paid during your trade or business. The IRS uses Form 1099-NEC specifically for nonemployee compensation.

Form 1099-NEC doesn't replace Form 1099-MISC. It replaced Form 1099-MISC for reporting nonemployee compensation.

The IRS revived Form 1099-NEC in 2020 to separate nonemployee compensation from other payments reported on Form 1099-MISC.

Before 2020, businesses generally reported nonemployee compensation in Box 7 of Form 1099-MISC.

What payments do you report?

Use Form 1099-NEC to report qualifying nonemployee compensation.

Examples include:

  • Fees
  • Attorney and legal fees
  • Commissions
  • Prizes
  • Awards
  • Other compensation for services

Important: IRS reporting requirements and thresholds can change. Verify the requirements for the applicable tax year before preparing your forms.

For tax years beginning after 2025, the IRS increased the reporting threshold for certain information returns to $2,000.

What information do you include?

Have new independent contractors complete Form W-9 to prepare Form 1099-NEC.

Include the following information when applicable:

  • Payer's name, address, and phone number
  • Payer's Taxpayer Identification Number (TIN)
  • Recipient's name, address, and TIN
  • Total nonemployee compensation
  • Federal and state income tax withheld

See the IRS Form 1099-NEC instructions for current reporting requirements.

Where do you send Form 1099-NEC?

Distribute the applicable Form 1099-NEC copies to the IRS, recipient, state tax department, and your business records.

For electronic filing, follow the current IRS filing requirements. For 2026 information returns filed in 2027, IRIS replaces FIRE as the IRS intake system.

Sage 100 Contractor users can also use Aatrix's eFiling service when available for their filing requirements.

When is Form 1099-NEC due?

File Form 1099-NEC with the IRS by January 31 of the year following the tax year.

Provide Form 1099-NEC to the recipient by January 31 as well.

When January 31 falls on a Saturday, Sunday, or legal holiday, IRS due-date rules apply.

Related resources

When do I use Form 1099-MISC and what is the deadline?

What forms to order for W-2 and 1099