1099-NEC.

Form 1099-NEC is the tax form a business sends to report money it paid you as a non-employee for your services once it crosses the reporting threshold.

Drafted with AI assistance. Not yet reviewed by a person · Last updated June 11, 2026

Source: Internal Revenue Service

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1099-NEC

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In plain English

Form 1099-NEC (Nonemployee Compensation) is the IRS form a business files and sends to a person or company it paid for services as an independent contractor, not as an employee. A payer generally must issue one when it pays you $2,000 or more in a year for your work (the threshold for 2026, raised from the former $600 and indexed for inflation after 2026). No taxes are withheld from these payments, so the income lands on you to report and pay tax on. The IRS gets a copy too, so the income is already on their radar.

Most useful ages

18 to 65

01Why it matters

Getting a 1099-NEC means no taxes were taken out for you, so you owe income tax plus self-employment tax on that money, and a surprise bill at filing time can be brutal if you did not set cash aside.

02The math, step by step

You freelance as a graphic designer and earn $9,000 from one client over the year. In January they send you a 1099-NEC reporting that $9,000. You report it on your tax return, and because nothing was withheld, you owe both income tax and the 15.3% self-employment tax on it, which is why quarterly estimated payments matter.

03What this is NOT

Do not confuse with A W-2

A 1099-NEC is not a W-2. A W-2 means you were an employee with taxes withheld; a 1099-NEC means you were paid as a contractor with nothing withheld, so the tax burden is entirely yours to manage.