1099-NEC vs 1099-MISC: Who Gets What in 2025?
If you’re a small business owner, there’s a good chance January looks like this:
Fifteen tabs open about 1099s
A spreadsheet of vendors
You, wondering, “Do they get a 1099-NEC or a 1099-MISC… or something else entirely?”
You’re not alone.
In this post, I’ll walk you through the big picture: who gets which form, when, and why for payments you make in 2025 (that you’ll report in early 2026).
Quick disclaimer: This is general information for U.S. small businesses. It’s not individual tax advice. Always double-check with your own tax professional for your specific situation.
The Big Picture: NEC = Services, MISC = “Everything Else”
Here’s the simplest way to think about it:
Form 1099-NEC (Nonemployee Compensation)
Used to report payments for services to non-employees
Example: contractors, freelancers, some attorney fees
Generally if you paid $600 or more to a non-employee for services in your business during the year, they may need a 1099-NEC.
Form 1099-MISC (Miscellaneous Information)
Used to report other types of payments, like:
Rents
Royalties
Prizes and awards
Certain legal settlements
Some payments to attorneys
Usually when these total $600 or more (or $10 for royalties) in a year.
Both forms are for business payments. Personal payments (paying your friend back for concert tickets, etc.) do not belong on a 1099.
When Do You Even Need to Issue a 1099?
For most small businesses, you’re looking at 1099s when all of these are true:
You made the payment in the course of your trade or business, not personally.
You paid the person or business $600 or more during the calendar year (for the types of payments that require reporting).
The payee is not your employee (employees go on Form W-2).
The payee is usually an individual, partnership, or LLC taxed as such. (Some corporations are exempt, but there are exceptions, especially for attorneys and medical/health-care payments.)
You didn’t pay them entirely by credit card or certain third-party processors where a 1099-K might apply (we’ll talk about that in a bit).
If you withheld backup withholding from someone’s payment, you generally have to file a 1099 even if you paid under $600.
Deep Dive: What Goes on Form 1099-NEC
Form 1099-NEC is the one most small business owners care about because it covers contractors and freelancers.
You typically use 1099-NEC for:
Independent contractors and freelancers (bookkeepers, graphic designers, virtual assistants, consultants, coaches, etc.)
Some director fees and other service payments to non-employees
Attorney fees for services (not settlements)
Other nonemployee compensation that belongs in Box 1 of 1099-NEC
The IRS describes 1099-NEC as the form used to report nonemployee compensation.
Threshold:
If you paid $600 or more for services during the year to a nonemployee, they’re likely in 1099-NEC territory.
Deep Dive: What Goes on Form 1099-MISC
Form 1099-MISC still exists — it just handles different types of income now.
You use 1099-MISC for things like:
Rents (Box 1) – for example, office or warehouse rent paid to an individual or non-corporate landlord
Royalties (Box 2) – if you paid $10 or more in royalties
Other income (Box 3) – prizes, awards, taxable grants, and other miscellaneous income
Medical and health care payments (Box 6) – e.g., payments to doctors or clinics if they meet reporting rules
Attorney gross proceeds (Box 10) – payments to attorneys that are not for their services but for settlements or other proceeds
Fish purchases from fishermen, crop insurance proceeds, and a few other specific categories
You might end up filing both a 1099-NEC and a 1099-MISC for the same attorney in some situations — 1099-NEC for their service fees, 1099-MISC for certain gross proceeds.
“But I Paid Them Through PayPal/Venmo/Stripe…”
Welcome to the 1099-K curveball. 😅
For 2025, payment platforms that act as third-party settlement organizations (like PayPal, Venmo, Cash App for business, many ecommerce platforms) issue Form 1099-K when certain thresholds are met.
As of late 2025, federal law has put the 1099-K threshold back to “over $20,000 AND more than 200 transactions”, although some states have lower thresholds.
Two key points for you as a payer:
Your contractor might get a 1099-K from the platform — but that doesn’t always relieve you from having to issue a 1099-NEC, especially when you’re paying from a bank account or sending funds directly.
The safest route is to set a clear internal policy and check with your tax pro on how you handle 1099-NEC when you pay through apps.
Due Dates for 2025 Payments (Filed in 2026)
For payments you make in calendar year 2025:
Form 1099-NEC
Due to recipients: generally January 31, 2026
Due to IRS (paper or e-file): January 31, 2026
Form 1099-MISC
Due to recipients: generally January 31, 2026
Due to IRS:
February 28, 2026 if filing on paper
March 31, 2026 if filing electronically
Also important: if you file 10 or more information returns total (across all 1099 types, W-2, etc.), you’re required to file electronically, not on paper.
How to Make This Easier in Your Bookkeeping
A little setup now saves a lot of stress in January. Here’s how I recommend small businesses tackle 1099s:
Flag 1099-eligible vendors early.
In your accounting system (like QuickBooks Online), mark vendors as 1099-eligible when you set them up—especially contractors, landlords, and attorneys.Collect W-9s before you pay.
Make it a rule: no W-9 = no payment for new vendors. That way you already have legal names, addresses, and tax IDs when it’s 1099 time.Use clear expense categories.
“Contractor – Services” (for 1099-NEC)
“Rent – Office” (for 1099-MISC)
“Attorney Fees” vs. “Attorney Settlement Proceeds” (so you can separate NEC vs MISC if needed)
Run vendor reports in December, not January 30th.
Do a 1099 pre-check in December to catch weirdness early—like vendors coded partly as “Supplies” and partly as “Contractor,” or payments posted to the wrong vendor.Don’t ignore small mistakes.
A wrong address or missing digit in a tax ID can cause headaches later. Double-check key details before you hit “file.”
When to Ask for Help
Reach out to your bookkeeper or tax pro if:
You’re not sure whether a payment belongs on NEC vs MISC
You have attorney payments (because those get complicated fast)
You’re using a lot of apps and platforms, and you’re unsure how 1099-K interacts with your 1099-NEC responsibilities
You’re close to or above the 10-form e-file threshold and need help getting set up
If you want help reviewing your 2025 vendor list, flagging who needs a form, and making sure your 1099s match what’s in your books, that’s exactly the kind of year-end project I do with clients.
