Simplify the process of filing 1099s for taxes. Follow our quick guide to learn how to automate 1099 filing securely and accurately online.
Payers send a copy of the completed 1099 information returns to the payee, the IRS, and states with income tax. The payers batch all 1099-NEC returns completed using transmittal form 1096 when they file form 1099-NEC with the IRS. Form 1096 is titled Annual Summary and Transmittal of U.S. Information Returns.
The difference between IRS Form 1099-NEC and Form 1099-MISC information returns is that Form 1099-NEC is used by payers to report nonemployee compensation and follow backup withholding rules. Form 1099-MISC is used by payers to report information on other types of miscellaneous nonemployee payments.
Payers are required to track payments with adequate bookkeeping during the year to later prepare information returns 1099-NEC and 1099-MISC. They should get W-9 forms from U.S. business service providers and Form W-8BEN certifications or other required forms from foreigners that are exempt from a 1099 form.