1099-NEC
Form 1099-NEC (Nonemployee Compensation) is the IRS information return a business files to report payments it made to an independent contractor during the year, with copies sent to the contractor and the IRS. A payer must generally file a 1099-NEC for each nonemployee it paid above the annual reporting threshold — $2,000 for payments made on or after January 1, 2026, raised from the long-standing $600. The contractor's W-9 supplies the name and taxpayer ID that go on it, and unlike a paycheck no tax is withheld — the contractor is responsible for their own taxes.
Related forms
Related guides
W-9 vs. W-4 vs. 1099: which tax form do you need?
Which form you need comes down to one question: are you an employee or a contractor? An employee fills out a W-4 so the employer withholds tax. A contractor fills out a W-9 to give the payer their taxpayer ID. The 1099 is filed by the payer to report what it paid.
How to set up recurring payments to a contractor
To pay an independent contractor on a recurring basis, first collect a signed Form W-9, agree on the amount, schedule, and method in a written agreement, then set up the payments — usually by ACH, check, or a platform. Keep records: you generally report contractor pay on Form 1099-NEC at year end.