1099-NEC vs 1099-MISC: Which One Do You File?
Since 2020, contractor pay moved from the 1099-MISC to the 1099-NEC — and mixing them up is a common error. Here's exactly which payments go on each form and how to file the right one.
If you paid a contractor and you're staring at two similar forms wondering which to use — here's the short version: contractor pay goes on the 1099-NEC. The 1099-MISC is for other kinds of payments. Mixing them up is one of the most common filing errors.
The quick answer
- 1099-NEC = Nonemployee Compensation. Money you paid a contractor, freelancer, or vendor for services. This is the one most small businesses file.
- 1099-MISC = Miscellaneous income. Rent, prizes, awards, some legal payments, royalties, and other non-service payments.
Before 2020, contractor pay went in Box 7 of the 1099-MISC. The IRS then split it out into its own form (the NEC) to fix late-filing confusion. If you're following old guidance, that's the change.
What goes on the 1099-NEC
File a 1099-NEC when you paid $600+ for services to a non-corporate payee by cash, check, or ACH:
- Independent contractors and freelancers
- Service vendors (consultants, designers, cleaners, subs)
- Commissions and fees to nonemployees
- Attorney fees for services
What goes on the 1099-MISC
File a 1099-MISC for these (thresholds vary by box):
- Rent ($600+) — e.g., office or equipment rent paid to a landlord
- Prizes and awards ($600+)
- Royalties ($10+)
- Other income payments, medical/health care payments
- Gross proceeds paid to an attorney (settlement proceeds — distinct from attorney fees, which go on the NEC)
The quick decision table
| You paid for... | Form |
|---|---|
| Contractor/freelancer services | 1099-NEC |
| Attorney fees (for services) | 1099-NEC |
| Office or equipment rent | 1099-MISC |
| Prize or award | 1099-MISC |
| Royalties | 1099-MISC |
| Legal settlement gross proceeds | 1099-MISC |
| Anything paid by credit card / processor | Neither (processor files 1099-K) |
The most common mistake
Putting contractor pay on a 1099-MISC out of habit. Since 2020 it belongs on the NEC — and the two forms even have different IRS deadlines (NEC is due to the IRS Jan 31; MISC to the IRS is later). Filing the wrong one can trigger notices. See the full 1099 deadlines guide.
How to file the right one, easily
- Confirm the payee even needs a 1099 — Who Gets a 1099?
- Collect a W-9 so you have their entity type and TIN.
- Generate the correct form with the 1099 generator.
- Track payments year-round with contractor payments so amounts are reconciled.
Frequently asked questions
What's the difference between 1099-NEC and 1099-MISC?
The NEC reports nonemployee compensation (contractor pay for services). The MISC reports other payments like rent, prizes, royalties, and legal settlement proceeds.
Which 1099 do I use for a contractor?
The 1099-NEC. Contractor pay for services moved from the MISC to the NEC starting with the 2020 tax year.
Do attorney payments go on the NEC or MISC?
Attorney fees for services go on the 1099-NEC. Gross proceeds paid to an attorney (like a settlement) go on the 1099-MISC.
What tool picks and files the right 1099 for me?
Use a platform like Holdings that tracks contractor payments and generates the correct 1099 form — so you don't have to guess between NEC and MISC.
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Contractor services → NEC. Rent, prizes, royalties, settlements → MISC. Confirm who needs one in Who Gets a 1099?, collect a W-9, and file the right form with the 1099 generator.