The 1099-NEC tracks payments for services (not goods) to self-employed contractors and disregarded entities. If the recipient isn't a corporation and you didn't pay them via credit card, there's likely a filing requirement when annual payments exceed $600. This guide walks through the determination process.
For business owners filing 1099-NEC forms, there's a companion document on completing the W-9 — a worksheet that walks through the determination:
Download: GTM Business Tax Readiness (PDF)
The basic premise
The 1099-NEC tracks payments for Services (not Goods) to self-employed contractors and disregarded entities. The key tests:
- The recipient is not a corporation (C Corp or S Corp)
- You didn't pay them via credit card
- Total payment exceeds $600 in the year
If all three conditions are met, there is likely a filing requirement.
Flowchart for filing determination
Have questions?
If you have questions on how the W-9 works, or when it might be needed, feel free to reach out via the contact form.