If you pay contractors or vendors, one January question comes up every year: is this a 1099-NEC or a 1099-MISC? Pick the wrong form and you risk penalties and IRS notices. Here's the plain-English answer for 2026, including the threshold change that trips up a lot of filers this year.
The short answer
- 1099-NEC = payments for services performed by someone who isn't your employee. If you hired a freelancer, contractor, or unincorporated business to do something, this is almost always your form.
- 1099-MISC = most other payments: rent, royalties, prizes and awards, medical and healthcare payments, and gross proceeds paid to an attorney.
The IRS split nonemployee compensation onto its own form (the 1099-NEC) in 2020 to fix a deadline conflict created by the 2015 PATH Act. Before that, contractor pay and things like rent shared the 1099-MISC but had different due dates — a recipe for errors.
The 2026 threshold change you can't miss
Under the One Big Beautiful Bill Act (OBBBA), the reporting threshold for both the 1099-NEC and 1099-MISC rose from $600 to $2,000 for payments made on or after January 1, 2026. So for the 2026 tax year:
- Issue a 1099-NEC to a contractor only if you paid them $2,000 or more for services.
- Issue a 1099-MISC at $2,000 or more for most categories — with one big exception: royalties are still reportable at $10 or more.
Use the 1099-NEC when…
You paid $2,000+ during the year to a non-employee for services. Typical examples:
- A freelance designer, developer, writer, or consultant
- A contractor or subcontractor (trades, repairs, construction)
- A professional (attorney fees for services go here in Box 1 — but see the attorney nuance below)
- Commissions or fees paid to a non-employee salesperson
It all goes in Box 1, nonemployee compensation.
Use the 1099-MISC when…
You made a payment that isn't compensation for services. The most common boxes:
| Box | What it reports |
|---|---|
| Box 1 | Rents (office, equipment, land) |
| Box 2 | Royalties ($10+ threshold) |
| Box 3 | Other income — prizes, awards, certain settlements |
| Box 6 | Medical and healthcare payments |
| Box 10 | Gross proceeds paid to an attorney (a settlement fund, not fees for legal services) |
The attorney trap (a classic mistake)
Attorney payments split across two forms depending on why you paid:
- Fees for legal services → 1099-NEC, Box 1.
- Gross proceeds (e.g., a settlement paid to a lawyer's trust account) → 1099-MISC, Box 10.
Getting this backward is one of the most common 1099 errors.
Deadlines: they're different, and that matters
| Form | Recipient copy | IRS (e-file) |
|---|---|---|
| 1099-NEC | January 31 | January 31 |
| 1099-MISC (most boxes) | January 31 | March 31 |
| 1099-MISC (boxes 8 & 10) | February 15 | March 31 |
The 1099-NEC is the tight one — both the recipient copy and the IRS filing are due January 31, with no automatic extension for the IRS copy. If a date falls on a weekend, it shifts to the next business day.
What both forms have in common
- You need a W-9 from every payee first (legal name, address, TIN).
- If you file 10 or more information returns total, you must e-file.
- A wrong name/TIN combination triggers an IRS CP2100 "B-notice" and possible 24% backup withholding — so validate TINs before filing. (More in our IRS TIN matching guide.)
The simplest way to get it right
The cleanest approach is a service that handles both forms, applies the correct 2026 thresholds, runs TIN matching, and delivers recipient copies and state filings for you. eFileMyForms files 1099-NEC and 1099-MISC (and dozens of other information returns) directly to the IRS, mails and emails recipient copies, supports state filing, and validates TINs before submission — so you're not guessing at boxes or deadlines.
FAQ
I paid a contractor $1,500 in 2026 — do I file a 1099-NEC? No. For 2026 the threshold is $2,000. Below that, no 1099-NEC is required.
Do payments to corporations need a 1099? Usually not — payments to C or S corporations are generally exempt, with exceptions (attorney fees and medical payments are reportable even to corporations). When in doubt, get the W-9 and check the entity type.
Can I file both forms for the same vendor? Yes, if you made both types of payment — e.g., you paid a contractor for services (NEC) and also rented equipment from them (MISC). They'd receive both.
What if I used the wrong form? File a correction as soon as you catch it. A service that lets you file and correct in one place makes this far less painful.
eFileMyForms files both 1099-NEC and 1099-MISC with the correct 2026 thresholds, handles recipient delivery and state filing, and validates TINs before you submit.
Sources: IRS Instructions for Forms 1099-MISC and 1099-NEC; IRS General Instructions for Certain Information Returns; OBBBA reporting-threshold changes.
