This article was updated for Tax Year 2023, last edited on December 18th, 2023.
Form 1099-NEC reports nonemployee compensation, such as for independent contractors. It details compensation paid in a given tax year, plus any federal, state and local taxes withheld. A 1099-NEC is required to be filed for workers who were paid at least $600 for services but didn’t withhold taxes under an employment arrangement.
Per the IRS, you should receive a 1099-NEC instead of a W-2 when the payer did not consider you an employee and may not have withheld income tax or Social Security and Medicare tax. For example, if you were an independent contractor, freelancer, sole proprietor, or a self-employed individual, you might receive a 1099-NEC for work you did during the tax year.
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