Form 1099-NEC is used by payers to report payments of $600 or more made in the course of a trade or business to others for services. Prior to 2020, these payments were reported in box 7 on Form 1099-MISC.
Payments reported as nonemployee compensation (NEC) have four characteristics:
- The payments made during the year totaled $600 or more.
- The payee was not an employee of the payer.
- Payment was made in the course of a trade or business, including nonprofits and government agencies.
- Payment was made to an individual, a partnership, or an estate; or, payment was made to a corporation if the payment was for fish purchases or attorney fees.
Where to enter Form 1099-NEC?
To enter, go to:
- Income (Select My Forms)
What payments are included in Box 1?
Income included in box 1 includes fees and commissions, prizes and awards (for services performed as a nonemployee), other compensation for services performed by an individual who is not your employee, and fish purchases for cash. Include oil/gas payments for a working interest (whether or not services are performed).
Is my income subject to self-employment tax?
Generally, amounts reportable in box 1 are subject to self-employment tax. If payments to individuals are not subject to this tax and are not reportable elsewhere on Form 1099-NEC, report the payments in box 3 of Form 1099-MISC. However, if the payments are for work performed, the income is most likely subject to self-employment tax.