Once you are ready to begin your tax filing, you must gather the required information to prepare Form 1099-NEC. This includes information for the business, or payer, and recipient, or payee, as well as the amounts paid to the recipient.
Form 1099-NEC is used to report nonemployee compensation amounts to the IRS. A nonemployee is defined as a person or business who is not employed by your company, such as independent contractors, freelancers, or outsourcing companies.
What information is needed to prepare form 1099-NEC?
Business Information
To prepare Form 1099-NEC you will need to include the following information:
- Federal Employer ID Number
- Business Name
- Business Address
Learn more about Form 1099-NEC filing and become a master at reporting using our downloadable PDF Guide below.
Recipient’s Information
Before completing a 1099-NEC form for any non-employee, have them fill out a W-9 form. A W-9 form, like W-4s for employees, will provide you with the relevant information for the recipient such as their name, address, and tax identification number.
Payment Amounts
For tax year 2025, a Form 1099-NEC must be filed for each payee who received $600 or more in nonemployee compensation during the calendar year. Nonemployee compensation includes payments for services performed by someone who is not your employee, along with certain other types of reportable payments.
Form 1099-NEC is required when:
- Total payments for services to an individual, partnership, estate, or certain corporations are $600 or more for the year (Box 1).
- Any amount of federal income tax was withheld under backup withholding rules, even if payments total less than $600.
- Any amount of excess golden parachute payments is made (reported in Box 3 beginning in tax year 2025).
Be sure to report each payment in the proper box because the IRS uses this information to determine whether the recipient has properly reported the payment.
Next Steps
Once you have gathered information to prepare form 1099-NEC you can:
Lastly, always be sure to check the deadlines well in advance! This helps to ensure that you’ll have everything completed in a timely manner.
BoomTax, The Boom Post, and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors prior to engaging in any transaction.
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