What is a 1099-NEC form? Filing rules and deadlines

Published Friday 20 March 2026

Table of contents

• Who should complete a 1099-NEC?
• 1099-NEC filing deadlines
• 1099-NEC vs other 1099 forms
• What do you have to do as the payer?
• Where do you get a 1099-NEC form?
• How do you fill in a 1099-NEC form?
• How do you file a 1099-NEC form?
• What do you need to do if you are the payee?
• Manage 1099-NEC filing with Xero
• FAQs on 1099-NEC forms

Key takeaways

• File a 1099-NEC form when you pay $600 or more to independent contractors, freelancers, or certain business entities for services during the tax year, but skip this requirement for credit card or third-party processor payments like PayPal.
• Collect W-9 forms from contractors before making payments to obtain their taxpayer identification numbers, then prepare and file 1099-NEC forms with the IRS by January 31 of the following year.
• Report all 1099-NEC income on your tax return if you're the recipient, even if you don't receive the form, and prepare to pay both federal income tax and 15.3% self-employment tax on these earnings.
• Avoid IRS penalties that start at $60 per form for late filing by preparing your 1099-NEC forms early in January, as penalties increase significantly the longer you wait to file.

Who should complete a 1099-NEC?

You must file a 1099-NEC if you paid a non-employee $600 or more for services during the tax year. This applies to payments made to freelancers, independent contractors, and certain business entities.

File a 1099-NEC when all of these conditions apply:

• Recipient status: you pay someone who is not your employee
• Business purpose: you pay for services performed in the course of your trade or business
• Entity type: you pay an individual, single-member LLC, partnership, LLC taxed as a partnership, or estate
• Payment threshold: total payments reach $600 or more for the year

Payments can include cash or non-cash benefits such as trade.

You don't need to file a 1099-NEC for credit card, debit card, or third-party processor payments like PayPal. Those financial institutions report these payments separately.

1099-NEC filing deadlines

The 1099-NEC filing deadline is January 31 of the year following the tax year. This deadline applies to both IRS filing and providing copies to recipients.

Filing dates:

• January 31: file 1099-NEC forms with the IRS
• January 31: send copies to all payees
• Next business day: if January 31 falls on a weekend or holiday, the deadline shifts to the following business day

If you miss the deadline, IRS penalties increase the longer you wait to file. For returns due in 2024, the penalty is $60 per form if you file up to 30 days late and increases from there, so it's best to prepare your forms early in January.

1099-NEC vs other 1099 forms

The 1099-NEC specifically reports non-employee compensation, while other 1099 forms cover different types of income. When you understand which form to use, you can stay compliant and avoid filing errors.

The most common 1099 forms differ as follows:

• 1099-NEC: reports payments of $600 or more to independent contractors and freelancers for services
• 1099-MISC: reports miscellaneous income like rent, prizes, and royalties (non-employee compensation moved to 1099-NEC in 2020)
• 1099-K: reports payments processed through third-party networks like PayPal or credit card processors

Before 2020, payers reported non-employee compensation on the 1099-MISC. The IRS reintroduced the 1099-NEC after the PATH Act accelerated the due date to report non-employee compensation, which helped separate contractor payments from other miscellaneous income.

What do you have to do as the payer?

As the payer, you must collect tax information, prepare forms, and meet IRS deadlines. Your four key tasks:

1. Collect W-9 forms: request a completed W-9 from each contractor before making payment to obtain their taxpayer identification number
2. Prepare 1099-NEC forms: complete a 1099-NEC for each qualifying payee at the end of the calendar year, along with a 1096 form if filing by paper
3. File with the IRS: submit forms to the IRS and your state tax department (if required) by January 31 of the following year
4. Send copies to payees: provide each non-employee with their 1099-NEC copy by January 31

The January 31 deadline may shift to the next business day if it falls on a weekend or holiday. If you file late, you may face IRS penalties.

Learn more about how Xero can help you with 1099s.

Where do you get a 1099-NEC form?

You can get 1099-NEC forms through e-filing services, office supply stores, or directly from the IRS. Your options:

• E-filing service providers: complete and file forms online through approved providers
• Office supply stores: purchase paper copies from retailers
• IRS website: order paper copies directly from the IRS online store

How do you fill in a 1099-NEC form?

A 1099-NEC form requires basic information about both the payer and recipient, plus payment details. The form has five key sections:

• Payer's information: your business name, address, and taxpayer identification number (TIN)
• Recipient's information: the payee's name, address, and TIN from their W-9 form
• Non-employee compensation: the total amount paid during the calendar year
• Federal income tax withheld: any federal taxes you withheld from payments
• State information: state tax details, when applicable

You may not need to complete the federal tax withheld or state information sections. Check the IRS instructions for 1099-NEC and 1099-MISC forms for guidance. Those instructions also include a completed form example.

How do you file a 1099-NEC form?

You can file 1099-NEC forms electronically or by mail. Electronic filing is the fastest and most convenient option, and the IRS requires it if you have 10 or more information returns to file in aggregate.

Filing methods:

• E-filing service providers: submit forms online through approved providers for a small fee
• IRS FIRE system: register for the IRS Filing Information Returns Electronically system to submit forms directly
• Paper filing by mail: send paper forms along with a completed Form 1096 as a cover sheet

If you use Xero, you can e-file directly through integrated partners like Track1099, Tax1099, 1099SmartFile, TaxBandits, or Yearli. Find more e-filing options in the Xero App Store.

What do you need to do if you are the payee?

If you're an independent contractor or freelancer, you should receive a 1099-NEC from each client who paid you $600 or more during the tax year. You won't receive a 1099-NEC for credit card, debit card, or third-party processor payments like PayPal.

Your client completes the 1099-NEC and sends you a copy by January 31 of the following year. If you haven't received it by then, contact the client to request it.

You don't need to send the 1099-NEC to the IRS. The form is for your records when reporting income. However, you must report all income on your tax return, whether or not you receive a 1099.

For example, Joe is a freelance photographer who worked three months for a magazine and four months for a wedding photography business. Both businesses sent Joe 1099-NEC forms and filed copies with the IRS. When Joe prepared his tax return, he reported this income along with other earnings and paid income tax on the total.

Manage 1099-NEC filing with Xero

You don't have to struggle to track contractor payments and file 1099-NEC forms. Xero helps you stay organized throughout the year so tax time is simpler.

With Xero, you can:

• Track contractor payments: monitor payments to non-employees in one place
• E-file directly: connect with integrated partners like Track1099, Tax1099, and TaxBandits to file forms electronically
• Stay compliant: access tools and resources to help you meet IRS deadlines

If you need personalized guidance, the Xero advisor directory can help you find an accountant or bookkeeper in your area.

Ready to simplify your 1099 process? Get one month free and see how you can streamline your filing.

FAQs on 1099-NEC forms

Here are answers to common questions about filing or receiving a 1099-NEC.

Do I have to report a 1099-NEC on my taxes?

Yes. If you receive a 1099-NEC, you must report that income on your tax return. You must report all income, even if you don't receive a 1099 form.

What taxes do I pay on 1099-NEC income?

You pay federal income tax plus self-employment tax (Social Security and Medicare) on 1099-NEC income. The self-employment tax rate is 15.3% on net earnings. This rate consists of two parts: 12.4% for social security and 2.9% for Medicare.

What happens if I file a 1099-NEC late?

If you file late, IRS penalties increase based on how late you file. Penalties range from $60 to $330 per form, depending on the delay. For returns due in 2025, the IRS notes the penalty starts at $60 if you file up to 30 days late and increases to $330 if you file after August 1.

Do I need to send a 1099-NEC to an LLC?

It depends on how the LLC is taxed. Send a 1099-NEC to single-member LLCs and LLCs taxed as partnerships. You generally don't need to send one to LLCs taxed as corporations, as the IRS states you don't need to file for a business that is incorporated, unless you paid for medical or legal services.

What's the difference between 1099-NEC and 1099-MISC?

The 1099-NEC reports non-employee compensation for services, while the 1099-MISC reports other types of income like rent, royalties, and prizes. The IRS moved non-employee compensation from 1099-MISC to 1099-NEC in 2020.