If you paid a freelancer or contractor $600 or more in 2024, you’re likely required to file IRS Form 1099-NEC by January 31, 2025. This form reports nonemployee compensation—and filing it accurately is crucial to staying compliant and avoiding penalties.
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This step-by-step guide walks you through how to fill out a 1099-NEC, who needs to receive one, when it’s due, and what to watch out for.
What Is a 1099-NEC?
The 1099-NEC (Nonemployee Compensation) form is used to report payments made to independent contractors, freelancers, or other non-employees for services rendered.
The IRS reintroduced Form 1099-NEC in 2020 to separate contractor compensation from the older 1099-MISC form.
Who Needs to File a 1099-NEC?
You need to file a 1099-NEC if:
You paid $600 or more in a calendar year to a contractor or freelancer not classified as a W-2 employee.
Thepayment was for services (not goods or reimbursements).
The recipient is an individual, sole proprietor, or LLC (not a corporation, generally).
Examples:
Paying a graphic designer $2,000 to revamp your website.
Hiring a virtual assistant as an independent contractor.
Contracting a bookkeeper on a monthly retainer.
What You Need Before You Start
Before filling out the form, gather this info:
Contractor’s full legal name
Business name (if applicable)
Address
Taxpayer Identification Number (TIN)
Total amount you paid during the year
Your business’s legal name, address, and EIN
You should collect this data on a W-9 form before paying the contractor.
Step-by-Step: How to Fill Out a 1099-NEC
| Box | What to Enter |
|---|---|
| Box 1 | Total amount paid to the contractor for services |
| Box 4 | Federal income tax withheld (usually 0 unless backup withholding applies) |
| Box 5-7 | State income info (optional depending on state) |
Top of the form: Your business info and the contractor’s info (from the W-9).
Make sure names and TINs match IRS records to avoid B-notices.
Pro Tip: Double-check that you're using the correct year’s version of the form (2024 for payments made in 2024).
Where and How to File
IRS Copy A– File electronically or mail with Form 1096.
Copy B– Send to the contractor.
Copy C– Keep for your records.
Deadline:
Must be filed with the IRS and sent to recipients by January 31, 2025, whether you file electronically or by paper.
Common Mistakes to Avoid
❌ Sending the form late
❌ Using the wrong TIN or legal name
❌ Filing the wrong year’s form
❌ Reporting non-service payments (e.g. reimbursements)
Frequently Asked Questions
What if I forgot to send a 1099-NEC?
File it as soon as possible. The IRS may assess a penalty based on how late it is.
Can I email a 1099-NEC to a contractor?
Only if they’ve given written consent to receive it electronically.
Do I need to send a 1099 to an LLC?
Yes, if it’s a single-member LLC or taxed as a sole proprietor. No, if it’s taxed as an S- or C-corp (unless it’s a lawyer or medical provider).
What happens if the contractor’s name doesn’t match their TIN?
You may receive a “B notice” from the IRS. You’ll need to correct the form and possibly withhold taxes moving forward.
Want Help Filing 1099s Correctly?
Sam’s Listconnects you with accountants who specialize in small business compliance, contractor payments, and year-end filings. Save time—and avoid fines.Find an accountant who gets it!
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Author: Kimi, Co-founder of Sam's List
Kimi writes about what she's learning while building Sam's List and shares honest takeaways from her conversations with accountants and financial advisors across the country. None of this is financial advice—just the stuff most people wish someone told them sooner.
