The New 1099 Form
The new 1099 form isn't exactly new, it just hasn’t been used since 1982 under Ronald Reagan. The IRS decided to redesign the old Form 1099-MISC and implement the new 1099-NEC for the 2020 tax year. So what is the 1099-NEC form, and who gets it?
What Is the 1099-NEC Form?
The 1099-NEC reports non-employee compensation. In non-IRS speak, that means it records income from anyone that isn’t your employer. It reports how much you received during the year as well as what type of income it was. Note that this form does not record personal payments, only payments in exchange for trade or business.
Who Gets the 1099-NEC Form?
All sorts of people get 1099 forms for different reasons, so it can get a little tricky. A good example of who gets a 1099 are freelancers and independent contractors. The 1099 shows how much the freelancer or contractor was paid by the client, and that it was for a business transaction. Another example is if your business paid for a professional service like fees to an attorney, accountant, or architect.
If you received a 1099 from your employer, then they consider you an independent contractor, not an employee. This is different from a W-2, which is given