Direct Answer
Use Form 1099-NEC to report at least $2,000 in nonemployee compensation for services paid during 2026. Use Form 1099-MISC for other reportable payments, including rents, prizes and awards, certain medical payments, and gross proceeds paid to an attorney. The reporting threshold depends on the payment type: some categories remain at $10 or $600, so check the instructions for the specific box before filing.
Key Takeaways
- Form 1099-NEC generally reports $2,000 or more paid for nonemployee services in 2026.
- Form 1099-MISC reports several other payment categories, but not all share the same threshold.
- Royalties and certain broker payments generally have a $10 threshold.
- Gross proceeds paid to an attorney generally have a $600 threshold.
- Payments made by card or through a third-party settlement organization are generally reported by the payment settlement entity on Form 1099-K.
Why There Are Two Forms
Nonemployee compensation used to appear on Form 1099-MISC. It now has its own form, Form 1099-NEC, with a different filing deadline. Separating the forms helps distinguish payments for services from other types of reportable income.
Use Form 1099-NEC for Services
For payments made in 2026, businesses generally use Form 1099-NEC when they pay a nonemployee at least $2,000 for services performed in the course of their trade or business. Common examples include payments to independent contractors, freelancers, consultants, and service providers. Payments for parts and materials supplied as part of a service are generally included in the reportable amount.
The $2,000 threshold applies to payments made in 2026. The IRS says the threshold may be adjusted for inflation beginning in calendar year 2027. Certain special rules and payment types can apply, so consult the current IRS instructions for your situation.
Use Form 1099-MISC for Other Payments
Form 1099-MISC covers several kinds of payments, and the reporting threshold depends on the category. For 2026, many categories use a $2,000 threshold, including rents, prizes and awards, other income, and certain medical and health care payments. Royalties and certain broker payments in lieu of dividends or tax-exempt interest generally have a $10 threshold. Gross proceeds paid to an attorney generally have a $600 threshold.
These are examples, not a complete list. The payment’s nature and the box used on the form determine which rule applies. Review the Instructions for Forms 1099-MISC and 1099-NEC before deciding that a payment is below the reporting threshold.
Common Form-Selection Mistakes
Attorney payments. Fees paid for an attorney’s services are generally reported on Form 1099-NEC when the applicable threshold is met. Gross proceeds paid to an attorney, such as certain settlement proceeds, are generally reported on Form 1099-MISC and use a different threshold.
Corporations. Some payments to corporations are exempt from reporting, but exceptions apply, including certain medical and legal payments. Do not rely only on a vendor’s business suffix. Use the payee’s Form W-9 and the current IRS instructions.
Card and third-party network payments. Payments made by payment card or through a third-party settlement organization are generally reported by the payment settlement entity on Form 1099-K, rather than again by the business on Form 1099-NEC. Check the payment method before totaling reportable payments.
Worker classification. If the worker is an employee under the applicable rules, report wages on Form W-2 instead of treating the worker as an independent contractor.
Check the Deadlines and Instructions
Form 1099-NEC has an earlier deadline than many Form 1099-MISC categories. The exact due date can shift when it falls on a weekend or legal holiday. Confirm the current filing and recipient-copy deadlines in the IRS instructions before scheduling your year-end work.
1099 Express supports information-return preparation and filing services. Contact the team at 1099express.com or call (361) 884-1500 to ask which options fit your forms and filing volume.
People Also Asked
Q: Can one payee receive both Form 1099-NEC and Form 1099-MISC?
Yes. If you make different reportable payment types to the same payee, report each payment on the form that applies to that payment.
Q: Do I send Form 1099-NEC to an LLC?
It depends on the LLC’s tax classification and the payment. Review the payee’s Form W-9 and the current IRS instructions.
Q: What if I am unsure which form applies?
Identify what the payment was for, check the payee’s Form W-9, and review the current IRS form instructions or consult a tax professional.