Form 1099-MISC vs. Form 1099-NEC
Both forms are used to report non-wage payments, but they serve different purposes after the IRS split reporting in 2020.
๐ Form 1099-MISC โ Miscellaneous Information
๐ Form 1099-NEC โ Nonemployee Compensation
๐ Form 1099-MISC vs. Form 1099-NEC โ Key Differences
๐น Purpose
*1099-MISC โ Reports miscellaneous payments (rent, royalties, prizes, legal settlements, etc.)
*1099-NEC โ Reports nonemployee compensation (independent contractors, freelancers, gig workers)
๐น Payment Types
*1099-MISC โ Rent, royalties, awards, certain attorney fees, other income over $600
*1099-NEC โ Services performed by nonemployees, $600+ payments for freelance/contract work
๐น Who Gets It
*1099-MISC โ Landlords, attorneys, prize winners, royalty earners, etc.
*1099-NEC โ Freelancers, consultants, service providers, gig workers
๐น Filing Deadline
*1099-MISC โ
To Recipient: January 31
To IRS: Feb 28 (Paper) / Mar 31 (E-file)
*1099-NEC โ
To Recipient & IRS: January 31 (same for both)
๐น IRS Change (Since 2020)
Before 2020, nonemployee compensation was reported on 1099-MISC (Box 7).
Now, it must be reported separately on 1099-NEC.
๐ก Example:
– Paid $10,000 to a contractor โ Report on 1099-NEC
– Paid $15,000 office rent โ Report on 1099-MISC
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