Ekue
What the form is
Form 1099-NEC reports nonemployee compensation: money your business paid to someone who is not your employee, for services. You send a copy to the contractor and file it with the IRS.
The threshold
For payments made in 2025 and earlier, a 1099-NEC is generally required when you paid a contractor $600 or more in the year. For payments made from 2026, the threshold rises to $2,000, adjusted for inflation in later years.
Who usually doesn't get one
- Corporations, including LLCs taxed as C- or S-corps. Attorneys are the main exception: they get one even when incorporated.
- Payments by card or through a payment app. Those are reported by the payment processor on Form 1099-K, so you leave them out of your own 1099-NEC totals.
- Employees. Their pay goes on a W-2.
- Goods. Paying for products or materials alone is not nonemployee compensation.
Collect a W-9 before you pay
Ask each contractor for a Form W-9 when you start working with them. It gives you their legal name, tax ID and entity type, which tells you whether they need a 1099 at all. Getting it in January, from someone you paid in May, is the hard way.
The deadline
The 1099-NEC is due to both the contractor and the IRS by January 31 of the following year. Late or missing forms can carry penalties.
What to track all year
- Which vendors are contractors you'll need to report
- Their W-9 details: legal name, tax ID, entity type
- What you actually paid them in the year, by date paid, not by invoice date
- How you paid: cash, check and bank transfer count; card and payment app don't
How Ekue keeps it
Mark a vendor as tracked for 1099 and keep their W-9 details on file; the tax ID is stored encrypted. Ekue totals what you actually paid each one in the year and flags who is over the threshold, as a report and a CSV ready for your filing service or tax agent.
This is a guide to keeping records, not tax advice. Check the current IRS instructions for Form 1099-NEC, or ask your tax agent, for your own situation.