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Understand payment categories for the 1099-MISC and 1099-NEC

by Intuit•161• Updated 6 days ago

If you pay contractors or vendors, you might need to issue them a 1099 form. The two most common forms for contractors or vendors are Form 1099-NEC, Nonemployee Compensation and Form 1099-MISC, Miscellaneous Information. For your convenience, we’ve listed the boxes from each form.

For most businesses, the correct and most common category to use is Box 1 - Nonemployee Compensation on the 1099-NEC.

If you have 10 or more combined 1099s, W-2s, or other federal forms to file, you must file them electronically. To learn more, see IRS and Treasury issue final regulations on e-file for businesses.

1099-NEC boxes

  • Nonemployee compensation (Box 1)
  • Payer made direct sales totaling $5,000 or more of consumer products to recipient for resale (Box 2)
  • Excess golden parachute payments (Box 3)
  • Federal income tax withheld (Box 4)
  • State information (Boxes 5-7)

1099-MISC

  • Rents (Box 1)
  • Royalties (Box 2)
  • Other income (Box 3)
  • Federal income tax withheld (Box 4)
  • Fishing boat proceeds (Box 5)
  • Medical and health care payments (Box 6)
  • Payer made direct sales totaling $5,000 or more of consumer products to recipient for resale (Box 7)
  • Substitute payments in lieu of dividends or interest (Box 8)
  • Crop insurance proceeds (Box 9)
  • Gross proceeds paid to an attorney (Box 10)
  • Fish purchased for resale (Box 11)
  • Section 409A deferrals (Box 12)
  • FATCA filing requirement checkbox (Box 13)
  • Nonqualified deferred compensation (Box 15)
  • State information (Boxes 16-18)
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