How to file 1099-NEC forms for contractors (free on IRS IRIS)
A 1099 is a form your business sends when it pays someone who isn't your employee, so the IRS knows they earned that money (no tax was taken out of it). 1099-NEC is for a contractor's work; 1099-MISC is for things like rent paid to an individual landlord. You send one copy to the person you paid and one to the IRS. The IRS threshold per person is $600 for payments made in 2025 and $2,000 for payments made in 2026; the IRS says it may adjust it for inflation starting in 2027. 1099-NEC goes to the IRS and the contractor by January 31. 1099-MISC goes to the recipient by January 31 and to the IRS by February 28 (March 31 if you e-file).
- Agency
- IRS
- Who has to do it
- Any business (LLC, corporation, or sole proprietor) files a 1099-NEC when all three are true, per the IRS: you paid someone who isn't your employee, the payment was for services in your business, and you paid them at least the threshold during the year. Employees get a W-2 instead, and personal (non-business) payments aren't reported. Payments to corporations generally aren't reported (attorney fees and some medical payments are), and card or payment-app payments go on Form 1099-K instead. Collect a W-9 from each contractor when you hire them; it tells you their legal name, tax ID, and business type.
- If it's late
- Per-form IRS penalties that grow the later you file (within 30 days, by August 1, or later), plus a separate penalty for late or wrong copies to the payee.
Step by step
Get each person's W-9
You need their legal name, address, and tax ID number. Ask now if you don't have it.
File on IRS IRIS
IRIS is the IRS's free filing site. The first time, you need an IRIS Transmitter Control Code (TCC): sign in with ID.me, choose New Application, then IRIS Application for TCC, with role Issuer, 1099 Series, and Portal. The IRS says it's usually ready in a day or two but can take up to 45 days, so apply well before January.
Send each person their copy
IRIS lets you download each payee's copy. Mail it, or email it if they agree, by January 31.
Report new contractors to California
From now on, EDD requires Form DE 542 within 20 days after you pay an individual contractor $600 or more in a year, or sign a contract for $600 or more, whichever comes first. Also check FTB's page on whether to file your 1099s with California.
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