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.

File Form 1099-NEC for each person in the course of your business to whom you have paid the following during the year at least $600 in:

  • Services performed by someone who is not your employee; (including parts and materials) (box 1); or
  • Payments to an attorney (box 1).

You must also file Form 1099-NEC for each person from whom you have withheld any federal income tax under the backup withholding rules regardless of the amount of the payment.

If the following four conditions are met, you must generally report a payment as NEC.

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

For more information regarding reporting non-employee compensation and exception to reporting refer to the Instructions for Forms 1099-MISC and 1099-NECPDF.

If you file Forms 1099-NEC on paper you must submit them with Form 1096, Annual Summary and Transmittal of U.S. Information Returns. If you file more than one type of information return on paper -- for example, 1099-NEC, 1099-MISC, 1099-K, etc. -- you must prepare a separate Form 1096 for each type of information return. Form 1096 is not required for filing electronically.

For more information, refer to Instructions for Forms 1099-MISC and 1099-NECPDFGeneral Instructions for Forms 1099, 1098, 5498, and W-2GPDF, and Publication 1220, Specifications for Filing Form 1098, 1099, 5498 and W-2G Magnetically or ElectronicallyPDF.

Nonemployee compensation paid to nonresident aliens is reported on Form 1042-S, Foreign Persons' U.S. Source Income Subject to Withholding. Withholding may be required on these payments. A Form 1042-T, Annual Summary and Transmittal of Forms 1042-S, is used to transmit paper Forms 1042-S to the Internal Revenue Service.

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.

E-file Forms 1099 With IRIS

The Information Returns Intake System (IRIS) Taxpayer Portal is a system that provides a no cost online method for taxpayers to electronically file Form 1099 series. This free electronic filing service is secure, accurate and requires no special software. This may be especially helpful to any small business that currently sends their 1099 forms on paper to the IRS. Through it they can submit automatic extensions, make corrections and reduce expenses related to paper filing. The Taxpayer Portal allows you to enter data to create Forms 1099 by either keying in the information or uploading a .csv file. For more information see Publication 5717, IRS Portal User GuidePDF. Taxpayer may continue to use the Filing Information Returns Electronically (FIRE) system to file your information returns.

Filing Electronically With FIRE System

The Filing Information Returns Electronically (FIRE) system is set up for financial institutions and others to file Information Return Forms 1042-S, 1098, 1099, 5498, 8027 or W-2G. Information Returns can be filed electronically, however, you must have software that can produce the file in the proper format as required by Publication 1220. FIRE does not provide an electronic fill-in form option.

Help with the FIRE System is Available

Help with electronic filing is available to payers, transmitters, and employers, by calling Technical Services Operation (TSO). 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:

E-filing Requirements Will Change Beginning in 2024

The Department of the Treasury and the Internal Revenue Service issued final regulations amending the rules for filing returns and other documents electronically (e-file). These regulations affect filers of many types of returns including information returns (for example, Forms 1099) and withholding tax returns (for example, Forms 945 and 1042).

For information returns, for example Form 1099 series, required to be filed on or after January 1, 2024, the final regulations:

  • reduce the 250-return threshold enacted in prior regulations to generally require electronic filing by filers of 10 or more returns in a calendar year.
  • require filers to aggregate almost all information return types covered by the regulation to determine whether a filer meets the 10-return threshold and is required to e-file their information returns.