Learn what each 1099 form does, its deadlines, and how to file correctly for your business.
Note: This information is for informational purposes only and does not constitute formal tax, legal, or compliance advice. Always consult with qualified tax advisors, legal counsel, and your organization’s internal teams for guidance specific to your situation. Additional regulations may apply. For the most accurate and up-to-date information, refer to official government resources and regulatory agencies.
Table of Contents
- The Importance of 1099 Forms
- All About Form 1099-NEC
- All About Form 1099-MISC
- Important IRS Deadlines
The Importance of 1099 Forms
If your business makes payments to individuals or organizations that aren’t employees—such as freelancers, independent contractors, or landlords—you’ll likely need to issue a Form 1099.
For years, Form 1099-MISC served as the catch-all form for reporting a variety of payments, including non-employee compensation. However, as the gig economy expanded and the number of independent workers increased, the IRS reintroduced Form 1099-NEC in 2020 to simplify things.
Now, the difference between the two is clear:
- Form 1099-NEC reports non-employee compensation.
- Form 1099-MISC covers miscellaneous payments like rent, royalties, and prizes.
Understanding which form to file—and when—is essential for compliance and avoiding IRS penalties.
Form 1099-NEC (Non-Employee Compensation)
Form 1099-NEC is specifically used to report payments of $600 or more to non-employees for services performed in the course of your trade or business.
You must file Form 1099-NEC if:
- The payment was made to someone who is not your employee.
- The payment was for services performed for your business.
- The payment was made to an individual, partnership, estate, or corporation (in limited cases).
- The total payment for the year was $600 or more.
How to File Form 1099-NEC
Form 1099-NEC has one main box (Box 1) for reporting non-employee compensation. You’ll enter the total paid to the recipient, along with their name, address, and taxpayer identification number (TIN).
Electronic filing is now the standard. As of the 2024 tax year (filing in 2025), businesses that file 10 or more information returns (W-2s, 1099s, etc. combined) must file electronically.
The IRS Information Returns Intake System (IRIS) allows businesses to submit forms directly online—but it requires a Transmitter Control Code (TCC). Many businesses choose a trusted e-filing partner like Greenshades to simplify this process and stay compliant with evolving IRS rules.
Form 1099-MISC (Miscellaneous Income)
Form 1099-MISC is used to report various types of other income not covered by 1099-NEC. This includes items like rent payments, royalties, prizes, or legal settlements.
You must file Form 1099-MISC for payments of $600 or more made for:
- Rents
- Prizes and awards (not paid to employees)
- Other income payments
- Gross proceeds to attorneys
- Payments subject to backup withholding
Royalties are an exception—only $10 or more in payments triggers a 1099-MISC filing.
How to File Form 1099-MISC
Form 1099-MISC includes multiple boxes for different income types. Ensure the correct amounts are reported in the appropriate box, and that all recipient information is accurate before filing.
Important IRS Deadlines
To stay compliant, businesses must complete and submit each 1099 form by the appropriate deadline:
- January 31:
- Furnish Form 1099-NEC to recipients and file with the IRS.
- Furnish Form 1099-MISC (with no data in Box 8 or 10) to recipients.
- Note: In 2026, the deadline is February 2, as January 31 falls on a Saturday.
- February 15:
- Furnish Form 1099-MISC (with data in Box 8 or 10) to recipients.
- Note: In 2016, the deadline is February 17 because the 15th falls on a Sunday and the 16th is a federal holiday.
- March 31:
- Deadline for electronic filing of 1099-MISC forms.
- Deadline for electronic filing of 1099-MISC forms.
State Filing Requirements
Not all states require 1099 submissions, and some participate in the Combined Federal/State Filing (CF/SF) Program, which allows one filing to cover both federal and state requirements. Always confirm with your state’s tax agency or a trusted advisor.
New for 2025 Year-End: Form Revisions to Note
The IRS April 2025 revisions to Forms 1099-NEC and 1099-MISC include a key change in reporting Excess Golden Parachute Payments:
- 1099-NEC (Box 3): Now used to report Excess Golden Parachute Payments.
- 1099-MISC (Box 14): Now reserved for future use.
Additionally, beginning in tax year 2026, the reporting threshold for these payments increases to $2,000.
While this update applies mainly to executive-level or corporate transactions, it’s important to stay aware of the change for accurate future filings.
Enhance Your 1099 Filing with Greenshades
The 1099 process can be straightforward when you utilize the appropriate tools. With Greenshades, you can simplify 1099 e-filing from start to finish:
- Reduce Manual Entry: Generate 1099s from your existing accounting and payroll data.
- Increase Accuracy: Built-in validation checks help prevent common errors and missing information.
- Stay Compliant: Automatically align with the latest IRS rules, e-file thresholds, and deadlines.
Learn how Greenshades can streamline your year-end filing process.
