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

SOLVEDby QuickBooksQuickBooks Desktop Payroll683Updated 4 days ago

Learn more about the boxes on Forms 1099-NEC and 1099-MISC.

If you are paying contractors or vendors, you may need to provide them with a 1099. The IRS has separated nonemployee compensation into two forms called the Form 1099-NEC and Form 1099-MISC.

Looking for what's new this year?

What forms or boxes do I choose?

If you filed 1099-MISC with only Box 7 in the past you should most likely choose Box 1 - Nonemployee Compensation on the 1099-NEC. This is the most common situation and the only box most businesses will need to select for payment types. If you have other payment types, you'll need to file both forms.

For your convenience, we’ve listed the boxes from each form. To learn more details about each box, or if you’re not sure what payment types you might have made to contractors this year, review the IRS’s instructions for Forms 1099-MISC and 1099-NEC, or consult your accountant.

1099-NEC

  • Nonemployee compensation (Box 1)
  • Payer Made Direct Sales Totaling $5,000 or More (Box 2)
  • Federal tax withheld on nonemployee compensation (Box 4)
  • State Information (Boxes 5-7)

1099-MISC

  • Rents (Box 1)
  • Royalties (Box 2)
  • Other Income (Box 3)
  • Federal 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 (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)
  • Excess Golden Parachute Payments (Box 14)
  • Nonqualified Deferred Compensation (Box 15)
  • State Information (Boxes 16-18)

What's new for tax year 2022?

  • Form 1099-NEC and Form 1099-MISC
    • Continuous-use form and instructions. Form 1099-MISC, Form 1099-NEC, and these instructions have been converted from an annual revision to continuous use. Both the forms and instructions will only be updated as needed in the future.
  • Form 1099-MISC:
    • New box 13. Box number 13 has been assigned to the Foreign Account Tax Compliance Act (FATCA) filing requirement checkbox. Subsequently, old box numbers 13 through 17 have been renumbered to new box numbers 14 through 18, respectively.

If you have other questions about 1099s, see Get answers to your 1099 questions.

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