Both forms report payments to people who aren't your employees, and the boxes overlap enough to trip up small businesses. 2026 also brings a new $2,000 threshold for most payments. This post sorts out which payment goes where, using the IRS Instructions for Forms 1099-MISC and 1099-NEC (Rev. December 2026).
What is the difference between 1099-NEC and 1099-MISC?
Form 1099-NEC reports pay for services by someone who isn't your employee. Form 1099-MISC reports other kinds of business payments that aren't for services, such as rent and royalties. Both are only for payments you make in the course of your trade or business; the instructions say personal payments are not reportable.
| Form 1099-NEC | Form 1099-MISC | |
|---|---|---|
| Main use | Nonemployee compensation for services | Rent, royalties, prizes, other income, attorney gross proceeds |
| 2026 threshold (most boxes) | $2,000 or more | $2,000 or more; royalties $10; attorney gross proceeds $600 |
| To the recipient | February 1, 2027 | February 1, 2027 (later date for boxes 8 and 10) |
| To the IRS | February 1, 2027, paper or electronic | March 1, 2027 on paper; March 31, 2027 electronically |
| New boxes | 1b cash tips, 1d qualified overtime | Box 14 qualified overtime |
When do you use Form 1099-NEC?
When all four of the IRS conditions are met: you paid someone who isn't your employee; the payment was for services in the course of your trade or business; you paid an individual, partnership or estate (or, in some cases, a corporation); and the payments total at least $2,000 for 2026.
- Fees paid to a freelance designer, bookkeeper or consultant.
- Fees paid to an attorney for legal services to your business, even if the law firm is a corporation.
- Commissions paid to a non-employee salesperson.
- Box 2 is a checkbox for direct sales: $5,000 or more of consumer products sold to someone for resale anywhere other than a permanent retail establishment.
The $2,000 threshold is new. The IRS instructions say that for tax years beginning after 2025 the minimum reporting threshold rose to $2,000 and may be adjusted for inflation from 2027. For 2025 payments it was $600.
When do you use Form 1099-MISC?
| Box | Payment | Report if |
|---|---|---|
| 1 | Rents, such as office or equipment rent | $2,000 or more |
| 2 | Royalties | $10 or more |
| 3 | Other income, such as prizes and awards not for services | $2,000 or more |
| 5 | Fishing boat proceeds | Any amount |
| 6 | Medical and health care payments | $2,000 or more |
| 10 | Gross proceeds paid to an attorney (not for the attorney's services) | $600 or more |
The attorney rule is the one that splits across both forms. Fees for an attorney's own legal services go on the 1099-NEC. Gross proceeds paid to an attorney in connection with legal services but not for them, such as a settlement paid to the claimant's attorney, go in box 10 of the 1099-MISC.
Payments that need neither form
- Wages to employees. They go on Form W-2.
- Personal payments, such as paying a plumber at your home or a family's payments to a nanny.
- Most payments to corporations, including LLCs taxed as C or S corporations. Attorneys' fees and medical and health care payments are among the exceptions.
- Payments made by credit card, debit card or through a third-party payment network. The instructions say the payment settlement entity reports these on Form 1099-K, not you on a 1099-NEC or 1099-MISC.
- Payments under the threshold for the year.
1099 deadlines for 2026 payments
The instructions set January 31 for 1099-NEC to both the IRS and the recipient, on paper or electronically, and January 31 for 1099-MISC to the recipient, with the IRS copy due February 28 on paper or March 31 electronically. A date on a weekend or legal holiday moves to the next business day, which gives these dates for 2026 forms:
| Form | To the recipient | To the IRS |
|---|---|---|
| 1099-NEC | Monday, February 1, 2027 | Monday, February 1, 2027 |
| 1099-MISC | Monday, February 1, 2027 (boxes 8 and 10: the later mid-February date in the General Instructions) | Monday, March 1, 2027 on paper; Wednesday, March 31, 2027 electronically |
File electronically if you have 10 or more information returns in the year, counting W-2s and all 1099s together. The IRS Information Returns Intake System (IRIS) is a free way to e-file 1099s. Paper Copies A go to the IRS with Form 1096.
Where PayDocs fits
The PayDocs 1099 hub leads to two generators: one for Form 1099-NEC and one for Form 1099-MISC. Each makes the recipient copies from your records, which you can preview free. The recipient's TIN shows as the last four digits only, which the IRS allows on recipient statements.
PayDocs doesn't make Copy A and doesn't file with the IRS. File through IRIS, on paper with Form 1096, or through a filing service. This is general information, not tax advice.
Questions
What is the difference between 1099-NEC and 1099-MISC?
1099-NEC reports pay for services by someone who isn't your employee, such as a contractor's fees. 1099-MISC reports other business payments: rent, royalties, prizes and other income, medical payments and gross proceeds paid to an attorney.
What is the 1099-NEC threshold for 2026?
$2,000. The IRS raised the minimum from $600 to $2,000 for tax years beginning after 2025, and says it may be adjusted for inflation from 2027.
When are 1099s due for 2026 payments?
1099-NEC is due to the recipient and the IRS by February 1, 2027. 1099-MISC goes to the recipient by February 1, 2027 and to the IRS by March 1, 2027 on paper or March 31, 2027 electronically.
Do I send a 1099 to a contractor I paid through a payment app or card?
No. The IRS instructions say payments by card or through a third-party payment network are reported on Form 1099-K by the payment settlement entity, not on Form 1099-NEC or 1099-MISC.
Where do attorney fees go?
Fees for an attorney's legal services to your business go in box 1a of Form 1099-NEC. Gross proceeds paid to an attorney that aren't for their services, such as a settlement, go in box 10 of Form 1099-MISC.
Sources
- IRS: Instructions for Forms 1099-MISC and 1099-NEC (Rev. December 2026)
- IRS: General Instructions for Certain Information Returns
- IRS: E-file information returns with IRIS
- IRS: Information return penalties (page updated 11 May 2026)
Sources checked October 7, 2026. This article explains how pay documents work; it is not tax or legal advice.
