What is Form 1099-NEC?

NEC stands for nonemployee compensation. A business that pays a contractor, such as a plumber, a landscaper or a bookkeeper, for services in the course of its trade or business generally files a 1099-NEC for each contractor paid above the threshold in a calendar year, and sends a copy to the contractor.

For many years the threshold was $600. Legislation passed in 2025 raises it to $2,000 for payments made after 2025, adjusted for inflation in later years. The form is generally due to both the IRS and the contractor by January 31. Check the current IRS instructions for the year you're filing.

Collecting a Form W-9 from each contractor before the first payment makes year-end filing far easier. Landlords and HOAs that pay vendors face the same question, and their accountants usually handle the filing. This is general information, not tax advice.