In 2020, taxpayers will be required to report nonemployee compensation on Form 1099-NEC. In years past, this would have been reported on Form 1099-MISC.  Starting this year, all nonemployee compensation paid during 2020 will need to be reported on 1099-NEC forms with the same due date of February 1, 2021.

There are four conditions that must be met to file a 1099-NEC:

  • The payment was made for services in the course of your business
  • The payment was made to a nonemployee
  • The payment was made to an individual, partnership, or estate
  • Payments made to the payee total $600 or more in the year

An example of payments to be reported on form 1099-NEC includes independent contractor fees.

A form 1099-NEC must also be filed for anyone whom you withheld federal income tax, even if it was less than $600, and any sales to a person that total $5,000 or more of consumer products.



Form 1099-MISC is still going to be in use for this tax year, it is just no longer used for items like independent contractor fees.

Uses for form 1099-MISC:

  • At least $10 in royalties
  • At least $600 in
    • Rents
    • Prizes and Awards
    • Other income that does not fall under any other categories
    • Medical and health care payments
    • Payments to an attorney