how to file 1099 for contractors

To file a 1099 for contractors in the U.S., you usually need to file Form 1099-NEC for each contractor you paid $600 or more in a year for business services.

Basic steps

1) Collect a W-9 before paying them

Ask each contractor to complete Form W-9, which gives you:

• legal name
• business name
• address
• tax classification
• taxpayer ID number (SSN or EIN)

2) Determine who needs a 1099-NEC

You generally file if:

• you paid an individual, LLC, or other non-employee for services
• total payments were $600+ during the year
• payments were made for business-related services

You typically do not issue a 1099-NEC for:

• payments to corporations in many cases
• employees paid on W-2
• payments for goods only
• many payments made by credit card/third-party processors (these are usually reported by the processor on 1099-K instead)

3) Fill out Form 1099-NEC

You’ll need:

• your business info
• contractor info from the W-9
• total amount paid in Box 1: Nonemployee compensation

4) Send the contractor their copy

Give the contractor Copy B by the IRS deadline.

5) File with the IRS

File the 1099-NEC with the IRS:

• By January 31 for payments made the prior year

If filing paper, you also send:

• Copy A to the IRS
• Form 1096 as a transmittal summary, if paper filing

If filing electronically, you generally do not use Form 1096.

Common deadlines

• Recipient copy: January 31
• IRS filing deadline: January 31

How to file

You can file:

• through accounting/payroll software
• through an e-file provider
• by paper, if allowed and appropriate

Important notes

• Keep records of payments and W-9s.
• If a contractor refuses to give a W-9, you may need to consider backup withholding.
• State filing rules may also apply.

If you want, I can also give you:

1. a step-by-step checklist,
2. a sample filled-out 1099-NEC, or
3. the rules for whether a specific contractor needs a 1099.