Reporting Payments to Independent Contractors

If you pay independent contractors, you may have to file Form 1099-NEC, Nonemployee Compensation, to report payments for services performed for your trade or business. If the following four conditions are met, you must generally report a payment as nonemployee compensation.

  1. You made the payment to someone who is not your employee;
  2. You made the payment for services in the course of your trade or business (including government agencies and nonprofit organizations);
  3. You made the payment to an individual, partnership, estate, or in some cases, a corporation; and
  4. You made payments to the payee of at least $600 during the year.

Note: Beginning with Tax Year 2020, you must use Form 1099-NEC, Nonemployee Compensation, to report payments of nonemployee compensation (NEC) previously reported in box 7 on Form 1099-MISC. The separate instructions for filers/issuers for Form 1099-NEC are available in the 2020 Instructions for Forms 1099-MISC and 1099-NEC.

Form 1099-NEC, Nonemployee Compensation, is transmitted with Form 1096, Annual Summary and Transmittal of U.S. Information Returns , which is similar to a cover letter for your Forms 1099-NEC.

Refer to Instructions for Form 1099-MISC PDF (PDF), General Instructions for Forms 1099, 1098, 5498, and W-2G PDF (PDF), and Publication 1220, Specifications for Filing Form 1098, 1099, 5498 and W-2G Magnetically or Electronically PDF (PDF), for more information.

Nonemployee compensation paid to nonresident aliens is reported on Form 1042-S, Foreign Persons' U.S. Source Income Subject to Withholding , where some withholding may be required.

Similar to Form 1096, Form 1042, Annual Withholding Tax Return for U.S. Source Income of Foreign Persons , must be filed if Form 1042-S is required. For more information on withholding on payments to nonresident aliens, see Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities and Publication 901, U.S. Tax Treaties.

Technical Services Operation (TSO)

TSO is available to payers, transmitters, and employers. When you call you will be provided guidance on the technical aspects for electronic filing through the Filing Information Return Electronically (FIRE) System, general information on information return reporting, and referrals for self-help resources and tax law topics on

Note:  TSO does not provide assistance with line-by-line computations or highly complex tax issues. TSO does not provide legal opinions.

For assistance with your individual tax return, refer to the "Help" tab on the home page. For refund inquires please click on the "Refunds" tab on the home page.

TSO can be reached at:

  • 866-455-7438 Toll-free
  • 304-263-8700 International
  • 304-579-4827 Telecommunications Device for the Deaf (TDD)