How to Send a 1099-NEC to the IRS

Filing a 1099-NEC with the IRS means sending two copies to the agency and one to the worker by January 31

You file a 1099-NEC by mailing or e-filing Form 1099-NEC to the IRS along with a transmittal form called Form 1096. The IRS requires you to send Copy A (the top copy) and Copy 1 to the agency, and you must also send Copy B to the worker who earned the income. The important date is January 31 of the year after payment was made — so payments you made in 2024 are due to the IRS by January 31, 2025.

You file only if you paid a non-employee — a contractor, freelancer, or other self-employed person — $600 or more during the calendar year. The threshold was $400 for prior years, but the IRS raised it to $600 starting in 2024. If you paid someone less than the threshold, you do not file a 1099-NEC for that person, though you may still report the payment on your own tax return.

Key Takeaways

• You must file a 1099-NEC for each non-employee you paid $600 or more in a calendar year, with copies due to the IRS and the worker by January 31.
• Form 1099-NEC reports non-employee compensation in Box 1, and you attach Form 1096 as a cover sheet when mailing to the IRS.
• You can mail paper forms or e-file through the IRS Filing Information Returns Electronically (FIRE) system, which requires registration in advance.
• The worker receives Copy B by January 31, and you keep Copy C for your records; the IRS receives Copy A and Copy 1.
• If you miss the important date, the IRS charges penalties that increase the longer you wait, so filing late is more costly than filing on time.

What information goes in each box on Form 1099-NEC

Box 1 is where you enter the total non-employee compensation you paid during the year. This is the main number the IRS uses to track income. If you paid someone $600 to $5,000, that amount goes in Box 1. If you paid them more, it still goes in Box 1 — there is no upper limit on what you report.

Boxes 2 through 7 are for specific types of payments: Box 2 is for federal income tax withheld (most 1099 workers have nothing here), Box 3 is for other income, Box 4 is for federal tax withheld under backup withholding, Box 5 is for fishing boat proceeds, Box 6 is for medical and health care payments, and Box 7 is for nonqualified deferred compensation. Most filers leave Boxes 2 through 7 blank because they are reporting straightforward contractor payments.

You must fill in the worker's name, address, and Tax Identification Number (usually their Social Security Number or Employer Identification Number). You also enter your own name, address, and Tax ID as the filer. If any of this information is wrong, the IRS and the worker will have mismatched records, which can trigger notices later.

Mailing paper 1099-NECs to the IRS

To mail paper forms, print Copy A and Copy 1 of the 1099-NEC for each worker, then attach them to Form 1096 as a cover sheet. Form 1096 summarizes how many 1099-NECs you are sending and the total amount reported across all workers. You sign Form 1096 and mail it along with all the Copy A forms to the IRS address listed in the Form 1096 instructions — the address changes by state, so check the current year's instructions before mailing.

Mail the forms by January 31. The IRS processes paper returns more slowly than e-filed returns, so if you are close to the important date, consider e-filing instead. If your forms arrive after January 31, you will owe a penalty that starts at $50 per form if you file within 30 days late, and increases to $100 per form if you file more than 30 days late (with a cap on total penalties per year).

Keep Copy C for your records and send Copy B to the worker by the same January 31 important date. The worker needs Copy B to file their own tax return, so sending it late can cause problems for them as well.

E-filing 1099-NECs through the IRS FIRE system

The IRS Filing Information Returns Electronically (FIRE) system lets you submit 1099-NECs online instead of mailing paper. To use FIRE, you must register with the IRS in advance — registration can take several weeks, so do not wait until January to start. You can register at irs.gov/fire or through an authorized e-file provider.

Once registered, you log into FIRE, enter the information for each 1099-NEC, and submit the file. The IRS confirms receipt when ready, which gives you proof that your filing went through. E-filed returns are processed faster than paper, and the important date is still January 31, though e-filing gives you a small buffer if you submit on the last day.

Some tax software and accounting platforms can also e-file 1099-NECs on your behalf if you use their service. If you use a payroll or accounting provider, ask whether they handle 1099-NEC filing as part of their service — many do, which saves you the step of registering with FIRE yourself.

What to do if you miss the January 31 important date

If you file after January 31, the IRS assesses a penalty. The penalty is $50 per form if you file within 30 days late, $100 per form if you file 31 to 60 days late, and $250 per form if you file more than 60 days late. The IRS caps total penalties per year — for 2024, the cap is $1,088,500 for large filers — but the per-form penalty still applies to each late 1099-NEC.

File as soon as you realize you missed the important date. The sooner you file, the lower your penalty. If you have a good reason for the delay — such as a serious illness or a natural disaster — you can request a penalty waiver by writing to the IRS and explaining the circumstances, though approval is not may provide.

Even if you file late, you must still send Copy B to the worker. The worker may have already filed their tax return without the 1099-NEC, which could trigger an IRS notice asking them to explain the discrepancy. Sending Copy B late does not solve that problem, but it does provide documentation of when you reported the income.

Correcting a 1099-NEC you already filed

If you filed a 1099-NEC and later discover an error — wrong amount, wrong worker name, wrong Tax ID — file a corrected form using Form 1099-NEC marked "CORRECTED" in the top left corner. Mail or e-file the corrected form to the IRS with a new Form 1096 transmittal, and send a corrected Copy B to the worker.

File the correction as soon as you find the error. If the error is small and you catch it before the worker files their tax return, the correction may prevent confusion. If the worker has already filed and reported different income, the IRS may send them a notice asking about the discrepancy — the corrected 1099-NEC helps explain what happened.

Do not straightforward cross out numbers on the original form and resubmit it. The IRS requires a new form marked "CORRECTED" so the agency can match it to the original filing and update its records.

Who must file 1099-NECs and who does not

You must file a 1099-NEC if you paid a non-employee $600 or more for services during the calendar year. Non-employees include independent contractors, freelancers, consultants, and other self-employed people. You do not file a 1099-NEC for employees — those are reported on W-2 forms instead.

You also do not file a 1099-NEC for payments to corporations (with rare exceptions), payments for goods rather than services, or payments made to a business that is not a sole proprietorship. If you paid a plumbing company (a corporation or partnership) rather than a self-employed plumber, you typically do not file a 1099-NEC. The rules vary by business structure, so if you are unsure whether a payment requires a 1099-NEC, check the Form 1099-NEC instructions or consult a tax professional.

Frequently Asked Questions

Do I have to file a 1099-NEC if I paid someone less than $600?

No, the IRS does not require you to file a 1099-NEC if you paid someone less than $600 in a calendar year. However, you should still report the payment on your own tax return as a business expense. Some states have lower thresholds than the federal $600, so check your state's rules as well.

What if the worker does not give me their Tax ID?

You must have the worker's Tax ID to file the 1099-NEC. If they do not provide it, ask them again before January 31. If they still refuse, you can file the form with the Tax ID marked as unknown, but this may trigger IRS notices to both you and the worker. The IRS may also impose backup withholding on future payments to that worker.

Can I e-file if I only have one or two 1099-NECs to file?

Yes, you can e-file any number of 1099-NECs, including just one or two. E-filing through FIRE or a tax software provider works the same way whether you have one form or one hundred. Many filers prefer e-filing even for small numbers because it is faster and gives you when ready confirmation of receipt.

What if the worker moved and I do not have their current address?

Use the address where they worked or where you last contacted them. The IRS uses the address on the 1099-NEC to mail Copy B to the worker, so if the address is wrong, they may not receive it. If you know the worker's address changed, contact them and ask for the new one before filing. If you file with an old address, the worker may not get their copy, which can cause problems when they file their tax return.

Do I need to file a 1099-NEC if I paid someone with a credit card or payment app?

If you paid through a payment app like PayPal, Venmo, or Square, the payment processor may file a Form 1099-K instead of a 1099-NEC. Check with the processor to see what they report to the IRS. If they file a 1099-K, you typically do not also file a 1099-NEC for the same payment, because that would create a duplicate report. If the processor does not file anything, you file the 1099-NEC yourself.