What Is a 1099 Form? Your Complete Guide to Non-Employee Income and Tax Reporting

A 1099 form reports income you earned as a non-employee, meaning taxes weren’t withheld from your pay throughout the year. You’ll typically receive one if you were paid as a freelancer, independent contractor, or gig worker, or if you earned certain types of interest, dividends, or other miscellaneous income.

If you get a 1099, that income generally needs to be reported on your tax return, and you may owe income and self-employment taxes on it. In short, a 1099 is how the IRS tracks money you earned outside a traditional W-2 job — and how you know what income you’re responsible for reporting.

What Is a 1099 Form?

A 1099 tax form reports income you received from a person or organization that isn’t your employer. The payer sends a copy to you and another to the IRS, letting both of you know how much you were paid during the year. The specific type of 1099 you receive depends on who paid you and the kind of income involved.

You might receive a 1099 in situations like these:

• You’re self-employed. A client may send you a 1099-NEC to report payments made for your services.
• You own a business. You may need to issue a 1099-NEC to contractors or freelancers you paid.
• You had debt forgiven. If a lender cancels part of your debt, you could receive a 1099-C reporting the forgiven amount.
• You earned interest. Banks and financial institutions typically send a 1099-INT if you earned interest on an account.

Just because you receive a 1099 tax form doesn’t mean you automatically owe taxes on the income you were paid. You might be able to use deductions or other tax loopholes to eliminate or reduce your tax liability. No matter if you end up owing or not, however, it’s vital that you report the income listed on the 1099 to the IRS if required.

Who Gets a 1099 Form?

A 1099 form is issued when certain forms of income are paid out. From contract work, to royalty earnings, to savings account interest could result in your receiving a 1099 form.

Here are a few reasons why you might receive a 1099 form:

• Independent contractor/freelancer income
• Earning interest or dividends on your investments
• Receiving certain government payments
• Having your debt canceled
• Selling real estate

Some forms of income require sending a 1099 after just $10 in income — such as royalties and broker payments in lieu of dividends or tax-exempt interest. Just remember, you need to report income even if you don’t receive a 1099.

Good To Know

You’ll get a 1099 for income earned in excess of $600. This includes 1099-NEC income and 1099-MISC income. For income earned through online marketplaces and payment apps like Venmo, you’ll only receive a 1099-K form after receiving $2,500 in income.

1099 vs. W-2: Understanding the Difference

Both 1099 forms and W-2 forms report income you have received. But they are designed for different types of income.

Here’s a breakdown of a few differences between W-2 and 1099 forms.

W-2 Forms

W-2 income is reported when you receive payment from a job that you are a part-time or full-time employee of.

• Issued by employers to employees
• Reports wages, salaries, and withheld taxes

1099 Forms

1099 forms are used for other types of income, including contract income, rents, royalties, interest, or dividends received.

• Issued by businesses or entities for non-employment income
• No taxes withheld by the payer, which implies self-employment tax responsibility
• Implications for the taxpayer, such as estimated taxes or deductions

Key Types of 1099 Forms Explained

The IRS has more than a dozen different 1099 forms, each used to report a specific type of non-employee income. While not every form applies to most taxpayers, a few show up far more often — especially for freelancers, independent contractors, landlords, and anyone earning income outside a traditional W-2 job.

Two of the most common forms are 1099-NEC and 1099-MISC. Here’s how they differ and when each one applies:

• 1099-NEC (Nonemployee Compensation). This form reports payments made for services performed by someone who isn’t an employee, such as a freelancer or independent contractor. You’ll typically receive a 1099-NEC if a client paid you $600 or more during the year.
  Income reported on a 1099-NEC is usually included on Schedule C and may be subject to self-employment tax.
• 1099-MISC (Miscellaneous Income). The 1099-MISC covers certain types of income that aren’t payments for services, such as rent, royalties, prizes, awards, or legal settlements. In most cases, it’s issued when payments total $600 or more, though some income types have different reporting thresholds. How you report 1099-MISC income depends on the nature of the income and whether it’s related to a business activity.

Both 1099-NEC and 1099-MISC forms are generally due to recipients by January 31, though deadlines can vary if the payer files by paper or reports certain types of income.

When Do You Receive a 1099-MISC Form?

You might receive a 1099-MISC form if you receive money from other sources outside of your job. This is used to report different types of income, such as:

• Rent
• Royalties
• Prizes
• Awards
• Healthcare payments
• Attorney payments
• Other income not paid for your services

In general, if you receive at least $600 in income from one of these sources, you’ll get a 1099-MISC in the mail. However, for royalties or broker payments in lieu of dividends or tax-exempt interest, that baseline is only $10.

When Do You Send a 1099-MISC Form?

If you’re a business owner and you made direct sales of at least $5,000 of consumer products to a buyer for resale anywhere other than a permanent retail establishment, you’ll need to send that person or business a 1099-MISC form for reporting purposes.

Deadlines to receive 1099-MISC tax forms:

• Standard: Jan. 31
• Tax return by paper: Feb. 28

Other Common 1099 Forms

Below is a summary of the types of 1099 forms and what they are used for.

Note: When a deadline falls on a weekend or federal holiday, the IRS moves it to the next business day. The dates below already reflect those adjustments for 2026.

Here are a few other common 1099 forms to be aware of:

• 1099-INT (Interest Income): If you earned interest in a Savings account or a CD, you might receive a 1099-INT form.
• 1099-DIV (Dividends and Distributions): If you own investments that pay out dividends, you may receive a 1099-DIV form.
• 1099-K (Payment Card and Third Party Network Transactions): If you received business income from an online marketplace (like Facebook) or through a payment app (like Venmo), you might receive a 1099-K form.
• 1099-R (Distributions from Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs): When you withdraw money from a retirement account, annuity, or pension, you’ll get a 1099-R form.
• 1099-C (Cancellation of Debt): If you have any debts cancelled, you’ll have to report that amount as income, which is listed on a 1099-C form.
• 1099-G (Certain Government Payments): If you received any unemployment income, or other government payment, you might receive a 1099-G form.

What To Do When You Receive a 1099 Form

If you receive a 1099, take a few minutes to review it before filing your taxes. A small error can create bigger problems later.

• Check the details for accuracy. Make sure your name, tax ID, and income amount are correct. Because 1099 forms are sent directly to the IRS, mistakes can make it look like you earned more — and owe more — than you actually do. If something’s wrong, contact the payer right away and ask for a corrected form.
• Save a copy for your records. Keep the original form with your tax documents. Scanning or photographing it and saving a digital copy is a smart backup in case the paper version gets lost.
• Report it on your tax return. Enter the 1099 information into your tax software or share it with your tax preparer. This helps you see how the income affects your tax bill and ensures it’s reported correctly to the IRS.

A 1099 is usually straightforward — it’s just a record of income the IRS already knows about.

Don’t Let This Cost You

Don’t ignore a 1099 form. This could cost you more money and increase your tax bill. You must report all 1099 income, regardless of whether it’s taxable or not.

How To File a 1099 Form

If you own a business and are paying independent contractors to do work for you, you’ll need to file a 1099-NEC form for non-employee compensation. To file the form, you’ll need to complete the following: 

1. Gather Information

Obtain W-9 forms from your contractors to have the details needed to complete the 1099 form. If you haven’t yet completed a W-9 for your contractors, you can download the form directly from the IRS website.

2. Complete the Form

You’ll use the information from the W-9 form and your payroll to complete the 1099-NEC form. This includes filling in the following details:

• Your business name and address
• Your business Taxpayer Identification Number (TIN)
• Recipient’s name and address
• Recipient’s Taxpayer Identification Number (TIN)
• Total amount of nonemployee compensation
• Any other payments made
• Federal taxes withheld, if any
• State tax withheld, if any
• State location and income

3. Send a Copy to the Recipient

When you fill out a 1099, there are multiple copies made. Copy B must be sent to your contract worker by the due date, which is Jan. 31.

4. Filing With the IRS

The first copy of the 1099 form (Copy A) can be mailed to the IRS or filed electronically through the IRS IRIS portal or your payroll software.

If you have 10 or more informational returns, you must electronically file. You must send 1099s to the IRS by Jan. 31.

5. Filing With Your State

Some states also require 1099 filing, and you’ll need to send your state a copy of the 1099 form by the form due date, usually Jan. 31.

Potential Tax Implications of 1099 Income

Receiving a 1099 means you earned income that must be reported to the IRS, and in most cases, it increases your taxable income.

If the income is reported on a 1099-NEC, it’s generally treated as business income and reported on Schedule C (or another business return, if applicable). Along with income tax, you may also owe self-employment taxes, which cover Social Security and Medicare.

Because taxes aren’t withheld from 1099 income, you may need to make quarterly estimated tax payments to avoid penalties at filing time. That said, 1099 earners can often reduce their tax bill by claiming business deductions that aren’t available to W-2 employees. Working with a tax professional can help ensure you’re paying what you owe — and not more than you should.

Your Next Steps After Receiving a 1099

If you receive a 1099 form, you’ll need to report it to the IRS. A 1099 is simply a report of income you earned or received throughout the year. The IRS always receives a copy of your 1099, so you can’t ignore it.

There are many types of 1099s, so it can be a good idea to work with a licensed tax professional if you aren’t sure how to report your 1099 on your tax return. An enrolled agent or CPA can help you prepare your return, report your 1099 income accurately, and find ways to lower your tax bill.