When would I provide a Form W-2 and a Form 1099 to the same person?


A worker’s role determines which information return an entity would provide. Entities provide a Form 1099-Misc to independent contractors and Form W-2 to employees. See this article on worker classification for more information. However, there may be instances where a worker may be serving as an independent contractor and an employee for the same entity.


Joe is a custodian who works for a county public school. The county views him as an employee and issues him a Form W-2 for these services. He also has a business that he owns and operates that provides snow plowing services on nights and weekends. Any snow plowing services he performs for the county are separate and distinct from his services as a custodian. Therefore the county should treat him as an independent contractor for his snow plowing business. The county reports this income on a Form 1099-Misc in Box 7, Nonemployee Compensation.

NOTE: You should never report taxable fringe benefits on Form 1099-MISC (Box 7 – Nonemployee Compensation). Report them on Form W-2.