1099-NEC vs 1099-MISC — Differences and When You Get Each
You got a 1099 in the mail, but which one? Since 2020, freelance and contractor income goes on the 1099-NEC. The older 1099-MISC still exists but covers a different set of payments. Here's what each form means and what you need to do with it.
Calculate your self-employment tax on 1099-NEC income with the Self-Employment Tax Calculator→Quick Comparison
| 1099-NEC | 1099-MISC | |
|---|---|---|
| Full name | Nonemployee Compensation | Miscellaneous Information |
| Reports | Freelance/contractor pay | Rent, prizes, royalties, other payments |
| Threshold | $600+ | $600+ (most categories) |
| Due to you by | January 31 | January 31 (most) or February 15 |
| Where you report it | Schedule C (usually) | Various (depends on income type) |
1099-NEC: Nonemployee Compensation
The 1099-NEC reports payments of $600 or more to non-employees for services. If a business hired you as a freelancer or independent contractor, this is the form you'll receive.
What Goes on a 1099-NEC
- Freelance and consulting fees
- Independent contractor payments
- Commissions to non-employees
- Professional service fees (attorney, accountant — if not a corporation)
- Gig worker payments (some platforms issue 1099-NECs, others use 1099-Ks)
Key Box
Box 1 — Nonemployee Compensation: The total amount paid to you during the year.
How to Report 1099-NEC Income
- Report the income on Schedule C (Profit or Loss from Business)
- Deduct business expenses on Schedule C
- Calculate self-employment tax on Schedule SE
- Pay both income tax and self-employment tax (15.3%) on the net profit
Example
You did freelance design work for three clients:
| Client | 1099-NEC Amount |
|---|---|
| Company A | $15,000 |
| Company B | $8,500 |
| Company C | $4,200 |
| Client D (paid $500 — no 1099 required) | Not reported on 1099 |
| Total self-employment income | $28,200 |
All of this goes on Schedule C, including the $500 from Client D — you must report all income regardless of whether you received a 1099.
1099-MISC: Miscellaneous Information
The 1099-MISC covers a range of payments that don't fit the 1099-NEC category.
What Goes on a 1099-MISC
| Box | Payment Type | Threshold |
|---|---|---|
| Box 1 | Rents | $600 |
| Box 2 | Royalties | $10 |
| Box 3 | Other income (prizes, awards, bartering) | $600 |
| Box 5 | Fishing boat proceeds | Any |
| Box 6 | Medical/health payments | $600 |
| Box 7 | Direct sales of $5,000+ | $5,000 |
| Box 8 | Substitute payments in lieu of dividends | $10 |
| Box 9 | Crop insurance proceeds | $600 |
| Box 10 | Attorney gross proceeds | $600 |
How to Report 1099-MISC Income
It depends on which box the income appears in:
| Income Type | Where to Report | Subject to SE Tax? |
|---|---|---|
| Rent (Box 1) | Schedule E | No (usually) |
| Royalties (Box 2) | Schedule E or Schedule C | Depends |
| Prizes/awards (Box 3) | Schedule 1, Line 8z | No |
| Attorney proceeds (Box 10) | Varies | Varies |
1099-NEC vs 1099-MISC: Real-World Scenarios
| Situation | Which Form? |
|---|---|
| You freelanced as a writer for a magazine | 1099-NEC |
| You rent your property to a business | 1099-MISC (Box 1) |
| You won $5,000 in a contest | 1099-MISC (Box 3) |
| You consulted for a startup | 1099-NEC |
| You receive book royalties | 1099-MISC (Box 2) |
| A law firm paid your legal settlement | 1099-MISC (Box 10) |
| You drove for Uber | 1099-NEC (or 1099-K) |
| You subcontracted plumbing work | 1099-NEC |
| An insurance company paid you crop insurance | 1099-MISC (Box 9) |
What About 1099-K?
There's a third form that often creates confusion: the 1099-K (Payment Card and Third-Party Network Transactions).
| Form | Who Issues It | Threshold (2026) |
|---|---|---|
| 1099-NEC | The client/company that paid you | $600 |
| 1099-MISC | The payer for rent, royalties, etc. | $600 (most boxes) |
| 1099-K | Payment platforms (PayPal, Venmo, Stripe, etc.) | $600 |
If you're a freelancer paid through PayPal, you might receive a 1099-K from PayPal instead of a 1099-NEC from the client. The income is the same — don't report it twice. The 1099-K reports gross payment volume; you still deduct expenses on Schedule C.
Common Issues
I Got Both a 1099-NEC and a 1099-K for the Same Income
This shouldn't happen, but it does. A client might issue a 1099-NEC while the payment platform (PayPal, Stripe) also issues a 1099-K. Report the income once — typically on Schedule C — and note the discrepancy. The IRS is aware of this double-reporting issue.
I Didn't Receive a 1099 — Do I Still Report the Income?
Yes. All income is taxable whether or not you receive a 1099. If a client paid you $500 (below the $600 threshold), you still report it on Schedule C. The 1099 is an information form — it doesn't create or eliminate a tax obligation.
My 1099 Has the Wrong Amount
Contact the payer and request a corrected form (1099 with "CORRECTED" checked). If they won't fix it, report the correct amount on your return and keep documentation showing the actual payments received.
I Got a 1099-MISC When It Should Be a 1099-NEC
This happens occasionally, especially with payers unfamiliar with the NEC/MISC split. Report the income correctly regardless of which form you received — the IRS cares about accurate reporting, not which box the payer used.
Deadlines
| Form | Due to Recipient | Due to IRS |
|---|---|---|
| 1099-NEC | January 31 | January 31 |
| 1099-MISC | January 31 (most) | February 28 (paper) / March 31 (e-file) |
If you haven't received your 1099 by mid-February, contact the payer. You can also check your IRS transcript to see what 1099s have been filed under your Social Security Number.
If You're the One Paying
If you're self-employed and you paid someone $600+ for services, you may need to issue a 1099-NEC to them.
Who Gets a 1099-NEC from You?
| Paid To | Issue 1099-NEC? |
|---|---|
| Individual freelancer | Yes, if $600+ |
| LLC (single-member) | Yes, if $600+ |
| Partnership | Yes, if $600+ |
| S-Corporation | Generally no |
| C-Corporation | Generally no |
| Employee (W-2) | No — use W-2 instead |
You file 1099-NECs through the IRS FIRE system (e-file) or by mailing Copy A to the IRS. Get the recipient's W-9 form before making the first payment — it provides their name, address, and TIN.
FAQ
Are 1099-NEC and W-2 the same thing?
No. A W-2 is for employees — the employer withholds taxes and pays the employer share of FICA. A 1099-NEC is for independent contractors — no taxes are withheld, and the worker is responsible for their own self-employment tax.
What if my only income is 1099-NEC?
You file Schedule C to report income and expenses, Schedule SE for self-employment tax, and Form 1040. You should also make quarterly estimated tax payments to avoid underpayment penalties.
Can I dispute being classified as a 1099 contractor?
If you believe you should be classified as an employee (your employer controls when, where, and how you work), you can file Form SS-8 with the IRS to request a determination. If the IRS agrees, the employer owes back employment taxes.
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