Form 1099-MISC

In the United States, Form 1099-MISC is a variant of Form 1099 used to report miscellaneous income. One notable use of Form 1099-MISC is to report amounts paid by a business (including nonprofits) to a non-corporate US resident independent contractor for services (in IRS terminology, such payments are nonemployee compensation). The ubiquity of the form has also led to use of the phrase "1099 workers" or "the 1099 economy" to refer to the independent contractors themselves. Other uses of Form 1099-MISC include rental income, royalties, and Indian gaming profits.

The form is issued by the payer (e.g. business) and is due to the recipient (e.g. contractor) by January 31 and to the IRS by the last day of February each year for work done during the previous tax year. If the payer is registered to file electronically with the IRS the deadline for filing with the IRS is March 31. In accordance with the recently passed PATH Act, these deadlines will be changing so the mailing and transmittal are both January 31 moving forward starting with Tax Year 2016.

There are several use cases of Form 1099-MISC. Whether an income is taxable and whether it should be reported on Form 1099-MISC are distinct questions. There may be other forms, such as Form W-2 (for wages) or Form 1099-K (for payments made with a credit card) that must be filed instead.

One common use of Form 1099-MISC is to report payments by a business to US resident independent contractors. For the purpose of this form, "business" includes nonprofits and other organizations. In this case Form 1099-MISC needs to be issued only when the total amount paid during the tax year is at least $600, though the Form may still be issued at lower amounts. This is the case even if individual payment amounts are all less than $600. However, since Form 1099-MISC only concerns payments made to an individual as an independent contractor, if an individual becomes an employee later (see below), the $600 threshold need be met only for part of work done as an independent contractor.

In a business–contractor arrangement, the following must apply:

It is possible for a payee to start as a contractor and later become an employee. It is also possible for a payee to maintain two jobs—one as a contractor and the other as an employee—under the same payer. In these cases, the payee can receive both Form 1099-MISC and Form W-2.

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