The 1099 NEC form is required to be filed by U.S. citizens and resident aliens who have been paid $600 or more for services performed for a business by someone who is not an employee of that business. The form is used to report non-employee compensation (NEC) on your federal income tax return.
NEC includes, but is not limited to, payments for services performed by independent contractors, consultants, freelancers, and gig workers. It also includes payments for services performed by attorneys, accountants, and medical doctors.
The NEC form is filed with the IRS and is also provided to the payee. The payer must withhold federal income tax, Socia
l Security tax, and Medicare tax from the payment if the payee does not provide a valid Social Security number or taxpayer identification number.
If you are a payer, you will need to file a 1099 NEC form for each payee you have paid $600 or more during the year. If you are a payee, you will need to report your NEC income on your federal income tax return.
What are the penalties for not filing the 1099 NEC form?
If you are a payer and you fail to file a 1099 NEC form for each payee you have paid $600 or more to during the year, you may be subject to a penalty of $50 per form.
The 1099 NEC also includes payments for services performed by attorneys, accountants, and medical doctors. Companies must file 1099 NEC firms by January 31. Taxpayers must have this form submitted by February 28.
If you have any other questions about filing taxes or what forms you need, visit www.expatriatetaxreturns.com to connect with a tax specialist.