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Wajiha Danish is a Chartered Professional Accountant (CPA, CGA) and the Director at Monily Finance and Accounting LLC. With over 20 years of experience in accounting, financial reporting, audit, and finance operations, she has held senior roles across multinational, energy-sector finance teams, and public accounting. Wajiha is proficient in both US GAAP and IFRS, enabling her to support businesses with complex reporting and compliance requirements.
View ProfileIf you paid an independent contractor for services in the course of your trade or business, the form you usually issue is Form 1099‑NEC.
First, make sure the worker is actually a contractor and not an employee. If the worker is your employee, you generally use Form W‑2, not Form 1099‑NEC.
Next, get a completed Form W‑9 from the contractor. You use the W‑9 to obtain the contractor’s legal name, business name if any, address, federal tax classification, and taxpayer identification number. The IRS says you should keep the W‑9 in your files for at least four years.
Then determine whether the payment is reportable. For payments made in 2025, Form 1099‑NEC is generally required if you paid the contractor $600 or more during the year for services in your trade or business.
A 1099‑NEC is generally used only for business payments, not personal payments. Also, payments to corporations are generally not reported on Form 1099‑NEC, but there are important exceptions, including certain payments to attorneys.
If reporting is required, complete Form 1099‑NEC and report the contractor’s nonemployee compensation in box 1. If backup withholding applied, report the withheld federal income tax in box 4. If you were required to withhold backup withholding, you generally also must file Form 945.
You then must provide the contractor’s copy and file the form with the IRS by the deadline. For 2025 payments reported in 2026, Form 1099‑NEC is due to both the contractor and the IRS by February 2, 2026 because January 31, 2026 falls on a Saturday.
If you are required to file 10 or more information returns in the aggregate during the year, you generally must file electronically, under Treasury Decision 9972 and the General Instructions for Certain Information Returns. The IRS allows electronic filing through the IRIS system, and some filers may also use FIRE as provided in current IRS e‑file guidance.
If you are allowed to file on paper, you must send Copy A of Form 1099‑NEC to the IRS with Form 1096. For IRS paper filing, you must use an acceptable scannable Copy A; do not use an unofficial substitute. In some cases, you may print Copy A from IRS.gov when permitted by the current General Instructions and Publication 1179. You may use the recipient copy to furnish the contractor’s statement.
If the contractor is a foreign person, different federal withholding and reporting rules may apply, and Form 1099‑NEC may not be the correct form.
State information‑return rules are separate and may differ from the federal rules above. The controlling authority is the applicable state revenue department or tax agency.
Sources
IRS — Forms and associated taxes for independent contractors
IRS — Reporting payments to independent contractors
IRS — Instructions for Forms 1099-MISC and 1099-NEC (2025)
IRS — General Instructions for Certain Information Returns (2025)
IRS — E-file information returns
This information provided does not, and is not intended to, constitute legal advice.