If you paid contractors, freelancers, or landlords during the tax year, you are probably required to file a 1099 form. But which form do you use? We have a list of 1099s, but the common ones are 1099-NEC and 1099-MISC.
In this brief, we will explain to you how to choose the right form. Fill it out correctly without the headache!
What Is a 1099 Form
A 1099 form is a U.S.-based form, which is used to report income you paid to someone not on your payroll. Simply, we can say income that is not from a regular job or salary.
Who receives a 1099 Form?
You have to issue a 1099 Form to the individuals or businesses you paid $600 or above during the year, for services or income. Keep in mind that they are not your employees.
It typically includes:
- Freelancers or consultants
- Independent contractors
- Landlords
- Medicare and the healthcare provider( if you paid them for the service)
- Prize or award winners
- Royalties Recipients
The two most common forms are:
- 1099-NEC – For non-employee compensation
- 1099-MISC – For rent, royalties, legal settlements, and other types of income
Tip: Do not forget to collect a Form W-2 from payees before issuing a 1099. It is essential for their details, like name, address, and TIN.
Understand Which Form You Need:
If you are confused, check the information below to find out your required form:
| Payment Type | Use This Form |
| Contractor services | 1099-NEC |
| Rent (office, equipment, etc) | 1099-MISC |
| Medical and healthcare payments | 1099-MISC |
| Royalities | 1099-MISC |
| Legal settlements or attorney fees | 1099-MISC |
How to Fill Out Form 1099 NEC For Contractors
When to Use
Use 1099 NEC if you paid $600+ to a freelancer, gig worker, or other non-employee during the year.
1099-NEC requirements:
Below is the information required to fill out Form 1099 NEC:
Your business info (name, EIN, address)
- Recipient info like name, TIN, address from W-9.
- Total amount paid
- State ID number (if required)
- Backup withholding (if applicable)
Instructions:
Follow these instructions to fill out the Form 1099 NEC:
- Fill in your business info
- Enter the contractor’s details
- Report payments in Box 1
- Add backup withholding (Box 4) if needed
- Fill in state info (Boxes 5–7, if required)
IRS & Recipient Deadlines:
Send both IRS and contractor copies by January 31.
How to Fill Out Form 1099-MISC (For Rent, Royalties, etc.)
Use 1099-MISC if you paid for:
- Rent (e.g., office or equipment)
- Royalties
- Medical & health services
- Legal settlements
- Prizes, awards, or other income
Instructions:
These are the instructions to fill out Form 1099-MISC:
- Enter your business and recipient info
- Use the correct boxes:
- BOX 1—Rent! Report payments made to landlords or property managers.
- Box 2—Royalties paid for intellectual property such as copyrights, patents, or mineral rights.
- Box3—Medical and healthcare services payments made to doctors, hospitals, or other providers who are not employees.
- Box 6—Legal settlements and attorney fees related to services provided. This includes fees paid as part of settlement agreements.
- Box 10—Prizes, awards, or other miscellaneous income paid to individuals or businesses, such as contest winnings or nonemployee compensation that does not fit the NEC category.
- Box 4—Enter backup withholding if required.
- Add state details if required.
Deadlines for 1099 MISC:
These are the deadlines for submitting 1099 MISC:
- January 31 – Send to recipients
- February 28 – File with IRS (paper)
- March 31 – File with IRS (e-file)
Ditch the hassle of paperwork and E-file your 1099 MISC Forms with automated error detection and instant confirmation.
1099 paper vs. E-Filing
| Features | Paper Filling | E-Filling |
| Requires Form 1096 | Yes | No |
| Manual Mailing | Yes | No |
| TIN error checking | No | Yes |
| Confirmation | NO | Yes |
| Upload W-9s | No | Yes! With some providers. |
Paper filing is slow, has errors, and requires physical forms and mailing. Whereas E-filing is a faster, easier process. It helps you avoid common mistakes that lead to penalties. Here is the side-by-side comparison for better understanding:
Final Checklist Before You File:
- Collect a W-9 from every payee.
- You are reporting $600 or more in payments.
- You chose the right Form (NEC or MISC)
- You have checked your state’s 1099 filing rules.
- Meet the IRS deadline.
Penalties for Not Filing
The IRS can fine you:
- $60–$310 per form if late.
- $600+ per form for intentional disregard.
- Additional accuracy-related penalties if you misreport a TIN or amount.
Avoid penalties and human error. Our platform handles deadlines, TIN checks, and e-delivery. Start Secure E-Filing with E-File workforce payroll.
Frequently Asked Questions
Where do I mail Form 1099-MISC (paper)?
Use the IRS address listed in the General Instructions for Certain Information Returns. You must include Form 1096 as a cover sheet.
Can I get a copy of my 1099?
Yes. If you’re the recipient, contact the business that issued it. If you filed it through our platform, log in to download anytime.
If I paid a contractor via PayPal, do I issue a 1099?
No. If paid via PayPal or credit card, the processor may issue a 1099-K instead.
Do insurance companies get 1099s?
Yes, if they provide services (like medical providers), and payments exceed $600, a 1099-MISC may be required.
What is Form 1099-A used for?
It reports acquisition or abandonment of secured property – typically used by lenders, not for independent contractor payments.
What’s the penalty for not filing a 1099?
- $60–$310 per form (depending on how late)
- $600+ for willful failure.
- Plus interest and possible audit triggers.
Can I Fill Out a 1099 by Hand?
Yes, but the IRS requires special red-ink forms for Copy A. You can’t just download and print them from a PDF.
That’s why most businesses choose to e-file. It’s:
- IRS-compliant
- Faster
- More secure
- No printing or mailing
Filing manually? You’ll also need a Form 1096 cover sheet and blank 1099 forms. Or, e-file in 5 minutes, no paper needed.
