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1099-NEC and 1099-MISC at a glance
| Question | Form 1099-NEC | Form 1099-MISC |
|---|---|---|
| Primary use | Nonemployee compensation for services, including qualifying attorney fees | Rents, royalties, prizes and awards, medical and health care payments, crop-insurance proceeds, other income and other listed categories |
| Common 2026-payment threshold | $2,000 for qualifying services and attorney fees | $2,000 for many listed categories; $10 for royalties and broker payments in lieu of dividends or tax-exempt interest |
| Recipient statement | Generally January 31 | Generally January 31 |
| IRS filing deadline | January 31, whether filed on paper or electronically | February 28 on paper or March 31 electronically |
| Payment-card or qualifying network transaction | Generally not reported here when the intermediary reports it on Form 1099-K | Generally not reported here when the intermediary reports it on Form 1099-K |
These rules apply to payments made in the course of a trade or business. Personal payments are not reportable on either form.
When to use Form 1099-NEC
Services by a nonemployee
For 2026 payments, report at least $2,000 paid for services performed by someone who is not your employee. The amount includes related parts and materials. Typical examples include payments to independent contractors, freelancers and other service providers.
Attorney fees
Report qualifying fees paid for legal services on Form 1099-NEC. The IRS says “attorney” includes a law firm or another provider of legal services. This is different from gross proceeds paid to an attorney, which belong on Form 1099-MISC.
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Backup withholding
Form 1099-NEC is also required for amounts subject to backup withholding, regardless of the payment amount.
When to use Form 1099-MISC
Form 1099-MISC covers miscellaneous payment categories rather than ordinary nonemployee service compensation. For 2026 payments, the IRS instructions generally use a $2,000 threshold for the following categories:
- Rents
- Prizes and awards
- Medical and health care payments
- Crop-insurance proceeds
- Other income
- Certain notional-principal-contract payments
- Specified nonqualified-deferred-compensation amounts
- Gross proceeds paid to attorneys
Royalties and broker payments in lieu of dividends or tax-exempt interest have a $10 threshold for 2026 payments.
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The attorney-fee distinction
| Payment | Form | Why |
|---|---|---|
| Fees for legal services | 1099-NEC | They are nonemployee compensation for services. |
| Gross proceeds paid to an attorney | 1099-MISC | The payment is reported as gross proceeds rather than the attorney’s fee for services. |
Apply the category to the payment itself, not simply to the fact that the recipient is a lawyer or law firm.
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Do credit-card, PayPal and other network payments need a 1099?
Payments made by credit card, payment card or a qualifying third-party settlement network generally are reported on Form 1099-K by the payment settlement entity. In the ordinary case, the business that received the service does not also report that same transaction on Form 1099-NEC or 1099-MISC. Confirm whether the particular payment method is covered by Form 1099-K rules; a check, cash payment or direct bank transfer can remain subject to the applicable NEC or MISC requirement.
Special rule for consumer products sold for resale
For consumer-product sales totaling $5,000 or more to a person on a buy-sell, deposit-commission or other commission basis for resale, the payer may use either Form 1099-NEC box 2 or Form 1099-MISC box 7 under the IRS instructions. If you choose 1099-NEC, the IRS copy is due January 31, so the choice changes the filing timetable.
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Deadlines for 2026 payments
Form 1099-NEC
Give the recipient and file with the IRS by January 31 following the payment year, using paper or electronic procedures. If January 31 falls on a Saturday, Sunday or legal holiday, the next business day applies.
Form 1099-MISC
Give the recipient by January 31. File with the IRS by February 28 when filing on paper or by March 31 when filing electronically. The next-business-day rule applies when a deadline falls on a weekend or legal holiday.
How to choose the form
- Check the worker’s status. Employee wages belong on Form W-2, not either 1099 form.
- Classify the payment. Decide whether it was for nonemployee services, legal fees, rent, royalties, prizes, medical care, crop insurance, gross proceeds to an attorney or another listed category.
- Apply the threshold for the payment year. For 2026 payments, use $2,000 for the specified categories and $10 for royalties and broker payments in lieu of dividends or tax-exempt interest.
- Check the payment method. Determine whether a card or qualifying third-party network will issue Form 1099-K.
- Use the current IRS form revision and box instructions. Keep the recipient statement and IRS filing identical.
Electronic filing requirement
For information returns required on or after January 1, 2024, the IRS generally requires electronic filing when the aggregate number of returns of all applicable information-return types is 10 or more. Count the returns covered by the rule, rather than looking only at the number of 1099-NEC or 1099-MISC forms.
Quick Recap
Common mistakes to avoid
- Putting an independent contractor’s service payment on 1099-MISC instead of 1099-NEC.
- Using 1099-NEC for gross proceeds paid to an attorney, which belong on 1099-MISC.
- Reporting a card or qualifying network payment a second time when the processor issues 1099-K.
- Using an outdated threshold instead of the threshold for the tax year being filed.
- Missing the separate 1099-NEC and 1099-MISC IRS deadlines.
- Issuing either form for a personal, nonbusiness payment.
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