Form 1099 is a family of IRS information returns for payments that are not wages, such as pay to independent contractors, rent and interest. For employers, the one that matters most is Form 1099-NEC, and for payments from 2026 on its reporting threshold is $2,000.
| Form | Typical payment | Note |
|---|---|---|
| 1099-NEC | Fees to independent contractors | Due January 31, no automatic extension |
| 1099-MISC | Rent, royalties, some other payments | Different boxes and due dates by payment type |
| 1099-INT and 1099-DIV | Interest and dividends | Usually filed by banks and companies paying them |
| 1099-R | Retirement plan distributions | Filed by the plan or custodian |
| 1099-SA | HSA distributions | Filed by the HSA trustee |
See independent contractor for the classification question, Form 8809 for extensions and Form 1099-SA for HSA distributions.
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A property management company paid three people in 2026 without payroll. A web designer received $1,800, a locksmith $2,400, and a cleaner $26,000 for working set shifts five days a week, with company supplies, under a supervisor.
The web designer is under the $2,000 threshold for tax years after 2025, so no 1099-NEC is required, though the company keeps the invoices. The locksmith is over it, so the company files a 1099-NEC. January 31, 2027 is a Sunday, so the filing is due on Monday, February 1, 2027, and the locksmith gets a copy by then.
The cleaner is the real problem. A worker with set shifts, company supplies and a supervisor looks like an employee, not a contractor. Before filing a 1099-NEC for her, the company reviews her classification with its accountant and puts her on payroll from January, with time tracking, overtime and withholding.
Most January problems with Form 1099 start with missing details. Ask each contractor for a completed Form W-9, with their legal name, address and taxpayer identification number, before the first payment. Track payments to each payee through the year, so you know who passes the $2,000 threshold before December.
If a payee does not provide a taxpayer identification number, the payer may have to withhold backup withholding, currently 24%, from reportable payments. Payments to corporations generally do not need a Form 1099-NEC, with exceptions such as payments to attorneys, so the W-9 also tells you the payee’s entity type.
A cleaning company hires a window washer for monthly visits at $300 each. By the fourth visit, he still has not returned a W-9, and he will pass $2,000 for the year.
The company tells him in writing that without a W-9 it must start backup withholding on further payments. He returns the form the same week, so no withholding is needed. At year end his payments total $3,600, and the company files Form 1099-NEC with the correct name and number.
To report payments other than wages, such as fees paid to independent contractors, rent, interest and retirement distributions.
For tax years beginning after 2025, the IRS instructions say the minimum threshold for certain payments increased to $2,000, which may be adjusted for inflation from 2027.
January 31 to the IRS and to the recipient, or the next business day if January 31 falls on a weekend or holiday.
No. Classification depends on the actual working relationship, not on which form the business issues.
Income tax a payer must withhold from certain reportable payments, currently at 24%, when the payee does not give a correct taxpayer identification number.
Generally no, but there are exceptions, such as payments to attorneys. Check the IRS instructions for the payment type.
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