Instructions for Forms 1099-MISC and 1099-NEC (Rev. January 2024)

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Instructions for Forms

1099-MISC and 1099-NEC

(Rev. January 2024)

Miscellaneous Information and Nonemployee Compensation

Department of the Treasury

Internal Revenue Service

Section references are to the Internal Revenue Code unless

otherwise noted.

Future Developments

For the latest information about developments related to

Forms 1099-MISC and 1099-NEC and their instructions,

such as legislation enacted after they were published, go to

IRS.gov/Form1099MISC or IRS.gov/Form1099NEC.

What’s New

E-filing returns. The Taxpayer First Act of 2019 authorized

the Department of the Treasury and the IRS to issue

regulations that reduce the 250-return e-file threshold. TD

9972, published February 23, 2023, lowered the e-file

threshold to 10 (calculated by aggregating all information

returns), effective for information returns required to be filed

on or after January 1, 2024. Go to

IRS.gov/InfoReturn for

e-file options.

Reminders

General instructions. In addition to these specific

instructions, you should also use the current year General

Instructions for Certain Information Returns. Those general

instructions include information about the following topics.

•

Who must file.

•

When and where to file.

•

Electronic reporting.

•

Corrected and void returns.

•

Statements to recipients.

•

Taxpayer identification numbers (TINs).

•

Backup withholding.

•

Penalties.

•

The definitions of terms applicable for the purposes of

chapter 4 of the Internal Revenue Code that are referenced in

these instructions.

•

Other general topics.

You can get the general instructions from General

Instructions for Certain Information Returns at IRS.gov/

1099GeneralInstructions or go to IRS.gov/Form1099MISC or

IRS.gov/Form1099NEC.

Continuous-use form and instructions. Form 1099-MISC,

Form 1099-NEC, and these instructions are continuous use.

Both the forms and instructions will be updated as needed.

For the most recent version, go to

IRS.gov/Form1099MISC or

IRS.gov/Form1099NEC.

Form 1099-NEC, box 1. Box 1 will not be used for reporting

under section 6050R, regarding cash payments for the

purchase of fish for resale purposes.

Form 1099-NEC, box 2. Payers may use either box 2 on

Form 1099-NEC or box 7 on Form 1099-MISC to report any

sales totaling $5,000 or more of consumer products for

resale, on a buy-sell, a deposit-commission, or any other

basis. For further information, see the instructions, later, for

box 2 (Form 1099-NEC) or box 7 (Form 1099-MISC).

Online fillable copies.

To ease statement furnishing

requirements, Copies B, 1, and 2 have been made fillable

online in a PDF format available at IRS.gov/Form1099MISC

and IRS.gov/Form1099NEC. You can complete these copies

online for furnishing statements to recipients and for retaining

in your own files.

Filing dates. Section 6071(c) requires you to file Form

1099-NEC on or before January 31, using either paper or

electronic filing procedures. File Form 1099-MISC by

February 28, if you file on paper, or March 31, if you file

electronically.

Specific Instructions for Form

1099-MISC

File Form 1099-MISC, Miscellaneous Information, for each

person in the course of your business to whom you have paid

the following during the year.

•

At least $10 in royalties (see the instructions for box 2) or

broker payments in lieu of dividends or tax-exempt interest

(see the instructions for box 8).

•

At least $600 in:

1. Rents (box 1);

2. Prizes and awards (box 3);

3. Other income payments (box 3);

4. Generally, the cash paid from a notional principal

contract to an individual, partnership, or estate (

box 3);

5. Any fishing boat proceeds (box 5);

6. Medical and health care payments (box 6);

7. Crop insurance proceeds (box 9);

8. Gross proceeds paid to an attorney (box 10) (see

Payments to attorneys, later);

9. Section 409A deferrals (box 12); or

10.

Nonqualified deferred compensation (box 15).

You may either file Form 1099-MISC (box 7) or Form

1099-NEC (

box 2) to report sales totaling $5,000 or more of

consumer products to a person on a buy-sell, a

deposit-commission, or other commission basis for resale.

If you use Form 1099-NEC to report sales totaling

$5,000 or more, then you are required to file Form

1099-NEC with the IRS by January 31.

You must also file Form 1099-MISC for each person from

whom you have withheld any federal income tax (report in

box 4) under the backup withholding rules regardless of the

amount of the payment.

Be sure to report each payment in the proper box

because the IRS uses this information to determine

whether the recipient has properly reported the

payment.

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Trade or business reporting only. Report on Form

1099-MISC only when payments are made in the course of

your trade or business. Personal payments are not

reportable. You are engaged in a trade or business if you

operate for gain or profit. However, nonprofit organizations

are considered to be engaged in a trade or business and are

subject to these reporting requirements. Other organizations

subject to these reporting requirements include trusts of

qualified pension or profit-sharing plans of employers, certain

organizations exempt from tax under section 501(c) or (d),

farmers' cooperatives that are exempt from tax under section

521, and widely held fixed investment trusts. Payments by

federal, state, or local government agencies are also

reportable.

Reportable payments to corporations. The following

payments made to corporations must generally be reported

on Form 1099-MISC.

•

Cash payments for the purchase of fish for resale reported

in box 11.

•

Medical and health care payments reported in box 6.

•

Substitute payments in lieu of dividends or tax-exempt

interest reported in box 8.

•

Gross proceeds paid to an attorney reported in box 10.

Payments to attorneys. The term “attorney” includes a law

firm or other provider of legal services. Attorneys' fees of

$600 or more paid in the course of your trade or business are

reportable in box 1 of Form 1099-NEC, under section

6041A(a)(1).

Gross proceeds paid to attorneys. Under section

6045(f), report in box 10 payments that:

•

Are made to an attorney in the course of your trade or

business in connection with legal services, but not for the

attorney’s services, for example, as in a settlement

agreement;

•

Total $600 or more; and

•

Are not reportable by you in box 1 of Form 1099-NEC.

Generally, you are not required to report the claimant's

attorney's fees. For example, an insurance company pays a

claimant's attorney $100,000 to settle a claim. The insurance

company reports the payment as gross proceeds of

$100,000 in

box 10. However, the insurance company does

not have a reporting requirement for the claimant's attorney's

fees subsequently paid from these funds.

These rules apply whether or not:

•

The legal services are provided to the payer;

•

The attorney is the exclusive payee (for example, the

attorney's and claimant's names are on one check); or

•

Other information returns are required for some or all of a

payment under another section of the Code, such as section

6041.

For example, a person who, in the course of a trade or

business, pays $600 of taxable damages to a claimant by

paying that amount to a claimant's attorney is required to:

•

Furnish Form 1099-MISC to the claimant, reporting

damages pursuant to section 6041, generally in box 3; and

•

Furnish Form 1099-MISC to the claimant’s attorney,

reporting gross proceeds paid pursuant to section 6045(f) in

box 10.

For more examples and exceptions relating to payments to

attorneys, see Regulations section 1.6045-5.

However, these rules do not apply to wages paid to

attorneys that are reportable on Form W-2, Wage and Tax

Statement, or to profits distributed by a partnership to its

partners that are reportable on Schedule K-1 (Form 1065).

Payments to corporations for legal services.

The

exemption from reporting payments made to corporations

does not apply to payments for legal services. Therefore, you

must report attorneys' fees (in box 1 of Form 1099-NEC) or

gross proceeds (in box 10 of Form 1099-MISC), as described

earlier, to corporations that provide legal services.

Taxpayer identification numbers (TINs). To report

payments to an attorney on Form 1099-MISC, you must

obtain the attorney's TIN. You may use Form W-9 to obtain

the attorney's TIN. An attorney is required to promptly supply

its TIN whether it is a corporation or other entity, but the

attorney is not required to certify its TIN. If the attorney fails to

provide its TIN, the attorney may be subject to a penalty

under section 6723 and its regulations, and you must backup

withhold on the reportable payments.

Deceased employee's wages. When an employee dies

during the year, you must report the accrued wages, vacation

pay, and other compensation paid after the date of death. If

you made the payment in the same year the employee died,

you must withhold social security and Medicare taxes on the

payment and report them only as social security and

Medicare wages on the employee's Form W-2 to ensure that

proper social security and Medicare credit is received. On the

Form W-2, show the payment as social security wages

(box 3) and Medicare wages and tips (box 5) and the social

security and Medicare taxes withheld in boxes 4 and 6; do

not show the payment in box 1 of Form W-2.

If you made the payment after the year of death, do not

report it on Form W-2 and do not withhold social security and

Medicare taxes.

Whether the payment is made in the year of death or after

the year of death, you must also report the payment to the

estate or beneficiary on Form 1099-MISC. Report the

payment in

box 3 (rather than as nonemployee

compensation). See the Example that follows. Enter the

name and TIN of the payment recipient on Form 1099-MISC.

For example, if the recipient is an individual beneficiary, enter

the name and social security number of the individual; if the

recipient is the estate, enter the name and employer

identification number of the estate. The general backup

withholding rules apply to this payment.

Death benefits from nonqualified deferred compensation

plans or section 457 plans paid to the estate or beneficiary of

a deceased employee are reportable on Form 1099-MISC.

Do not report these death benefits on Form 1099-R.

However, if the benefits are from a qualified plan, report them

on Form 1099-R. See the Instructions for Forms 1099-R and

5498.

Example. Before Bailey's death on June 15, 2022, Bailey

was employed and Bailey received $10,000 in wages on

which federal income tax of $1,500 was withheld. When

Bailey died, Bailey’s employer owed Bailey $2,000 in wages

and $1,000 in accrued vacation pay. The total of $3,000 (less

the social security and Medicare taxes withheld) was paid to

Bailey's estate on July 20, 2022. Because Bailey’s employer

made the payment during the year of death, Bailey’s

employer must withhold social security and Medicare taxes

on the $3,000 payment and must complete Form W-2 as

follows.

•

Box 1—10000.00 (does not include the $3,000 accrued

wages and vacation pay).

•

Box 2—1500.00.

•

Box 3—13000.00 (includes the $3,000 accrued wages and

vacation pay).

•

Box 4—806.00 (social security tax withheld).

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•

Box 5—13000.00 (includes the $3,000 accrued wages and

vacation pay).

•

Box 6—188.50 (Medicare tax withheld).

Bailey’s employer must also complete Form 1099-MISC as

follows.

•

Boxes for recipient's name, address, and TIN—The

estate’s or beneficiary's name, address, and TIN.

•

Box 3—3000.00 (Even though amounts were withheld for

social security and Medicare taxes, the gross amount is

reported here.)

If Bailey’s employer made the payment after the year of

death, the $3,000 would not be subject to social security and

Medicare taxes and would not be shown on Form W-2.

However, Bailey’employer would still file Form 1099-MISC.

Payments made on behalf of another person. For

payments reportable under section 6041, if you make a

payment on behalf of another person who is the source of the

funds, you may be responsible for filing Form 1099-MISC.

You are the payor for information reporting purposes if you

perform management or oversight functions in connection

with the payment, or have a significant economic interest in

the payment (such as a lien). For example, a bank that

provides financing to a real estate developer for a

construction project maintains an account from which it

makes payments for services in connection with the project.

The bank performs management and oversight functions

over the payments and is responsible for filing information

returns for payments of $600 or more paid to contractors. For

more information, see Regulations section 1.6041-1(e).

Indian gaming profits, payments to tribal members. If

you make payments to members of Indian tribes from the net

revenues of class II or class III gaming activities conducted or

licensed by the tribes, you must withhold federal income tax

on such payments. File Form 1099-MISC to report the

payments and withholding to tribal members. Report the

payments in

box 3 and the federal income tax withheld in

box 4. Pub. 15-A contains the necessary Tables for

Withholding on Distributions of Indian Gaming Profits to Tribal

Members.

State or local sales taxes. If state or local sales taxes are

imposed on the service provider and you (as the buyer) pay

them to the service provider, report them on Form

1099-MISC as part of the reportable payment. However, if

sales taxes are imposed on you (as the buyer) and collected

from you by the service provider, do not report the sales

taxes on Form 1099-MISC.

Exceptions

Some payments do not have to be reported on Form

1099-MISC, although they may be taxable to the recipient.

Payments for which a Form 1099-MISC is not required

include all of the following.

•

Generally, payments to a corporation (including a limited

liability company (LLC) that is treated as a C or S

corporation). However, see Reportable payments to

corporations, earlier.

•

Payments for merchandise, telegrams, telephone, freight,

storage, and similar items.

•

Payments of rent to real estate agents or property

managers. However, the real estate agent or property

manager must use Form 1099-MISC to report the rent paid

over to the property owner. See Regulations section

1.6041-3(d); Regulations section 1.6041-1(e)(5), Example 5;

and the instructions for

box 1.

•

Wages paid to employees (report on Form W-2).

•

Military differential wage payments made to employees

while they are on active duty in the U.S. Armed Forces or

other uniformed services (report on Form W-2).

•

Business travel allowances paid to employees (may be

reportable on Form W-2).

•

Cost of current life insurance protection (report on Form

W-2 or Form 1099-R).

•

Payments to a tax-exempt organization including

tax-exempt trusts (IRAs, HSAs, Archer MSAs, Coverdell

ESAs, and ABLE (529A) accounts), the United States, a

state, the District of Columbia, a U.S. territory, or a foreign

government.

•

Payments made to or for homeowners from the HFA

Hardest Hit Fund or similar state program (report on Form

1098-MA).

•

Compensation for injuries or sickness by the Department

of Justice as a public safety officer (PSO) disability or

survivor's benefit, or under a state program that provides

benefits for surviving dependents of a PSO who has died as

the direct and proximate result of a personal injury sustained

in the line of duty.

•

Compensation for wrongful incarceration for any criminal

offense for which there was a conviction under federal or

state law. See section 139F, Certain amounts received by

wrongfully incarcerated individuals.

Form 1099-K. Payments made with a credit card or payment

card and certain other types of payments, including

third-party network transactions, must be reported on Form

1099-K by the payment settlement entity under section

6050W and are not subject to reporting on Form 1099-MISC.

See the separate Instructions for Form 1099-K.

Fees paid to informers. A payment to an informer as an

award, fee, or reward for information about criminal activity

does not have to be reported if the payment is made by a

federal, state, or local government agency, or by a nonprofit

organization exempt from tax under section 501(c)(3) that

makes the payment to further the charitable purpose of

lessening the burdens of government. For more information,

see Regulations section 1.6041-3(l).

Scholarships. Do not use Form 1099-MISC to report

scholarship or fellowship grants. Scholarship or fellowship

grants that are taxable to the recipient because they are paid

for teaching, research, or other services as a condition for

receiving the grant are considered wages and must be

reported on Form W-2. Other taxable scholarship or

fellowship payments (to a degree or nondegree candidate)

do not have to be reported to the IRS on any form, unless

section 6050S requires reporting of such amounts by an

educational institution on Form 1098-T. See section 117(b)–

(d) and Regulations section 1.6041-3(n) for more information.

Canceled debt. A canceled debt is not reportable on Form

1099-MISC. Canceled debts reportable under section 6050P

must be reported on Form 1099-C. See the Instructions for

Forms 1099-A and 1099-C.

Employee business expense reimbursements. Do not

use Form 1099-MISC to report employee business expense

reimbursements. Report payments made to employees under

a nonaccountable plan as wages on Form W-2. Generally,

payments made to employees under an accountable plan are

not reportable on Form W-2, except in certain cases when

you pay a per diem or mileage allowance. For more

information, see the

General Instructions for Forms W-2 and

W-3, and Pub. 463. For information on reporting employee

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moving expense reimbursements on Form W-2, see the

General Instructions for Forms W-2 and W-3.

Widely held fixed investment trusts (WHFITs). Trustees

and middlemen of WHFITs must report items of gross income

attributable to a trust income holder (TIH) on the appropriate

Form 1099. A tax information statement that includes the

information provided to the IRS on Forms 1099, as well as

additional information identified in Regulations section

1.671-5(e), must be furnished to TIHs. For details, see the

current year General Instructions for Certain Information

Returns.

Statements to Recipients

If you are required to file Form 1099-MISC, you must furnish a

statement to the recipient. For more information about the

requirement to furnish a statement to each recipient, and

truncation, see part M in the current year General Instructions

for Certain Information Returns.

You can furnish each recipient with a single payee

statement reporting all Form 1099-MISC payment types. You

are required to furnish the payee statements by January 31

and file with the IRS by February 28 (March 31, if filing

electronically).

Truncating recipient’s TIN on payee statements.

Pursuant to Regulations section 301.6109-4, all filers of this

form may truncate a recipient’s TIN (social security number

(SSN), individual taxpayer identification number (ITIN),

adoption taxpayer identification number (ATIN), or employer

identification number (EIN)) on payee statements. Truncation

is not allowed on any documents the filer files with the IRS. A

payer's TIN may not be truncated on any form. See part J in

the current year General Instructions for Certain Information

Returns.

2nd TIN Not.

You may enter an “X” in this box if you were notified by the

IRS twice within 3 calendar years that the payee provided an

incorrect TIN. If you mark this box, the IRS will not send you

any further notices about this account.

However, if you received both IRS notices in the same

year, or if you received them in different years but they both

related to information returns filed for the same year, do not

check the box at this time. For purposes of the

two-notices-in-3-years rule, you are considered to have

received one notice and you are not required to send a

second “B” notice to the taxpayer on receipt of the second

notice. See part N in the current year General Instructions for

Certain Information Returns for more information.

For information on the TIN Matching System offered

by the IRS, see the current year General Instructions

for Certain Information Returns.

Corrections to Form 1099-MISC

If you need to correct a Form 1099-MISC that you have

already sent to the IRS:

•

For paper forms, see part H in the current year General

Instructions for Certain Information Returns; or

•

For electronic corrections, see Pub. 1220.

If you are filing a correction on a paper form, do not

check the VOID box on the form. A checked VOID

box alerts IRS scanning equipment to ignore the form

and proceed to the next one. Your correction will not be

entered into IRS records if you check the VOID box.

TIP

CAUTION

Recipient's TIN

Enter the recipient's TIN using hyphens in the proper format.

SSNs, ITINs, and ATINs should be in the XXX-XX-XXXX

format. EINs should be in the XX-XXXXXXX format.

You should make every effort to ensure that you have

the correct type of number reported in the correct

format.

Account Number

The account number is required if you have multiple accounts

for a recipient for whom you are filing more than one Form

1099-MISC. The account number is also required if you

check the “FATCA filing requirement” box. See Box 13, later.

Additionally, the IRS encourages you to designate an account

number for all Forms 1099-MISC that you file. See part L in

the current year General Instructions for Certain Information

Returns.

Box 1. Rents

Enter amounts of $600 or more for all types of rents, such as

any of the following.

•

Real estate rentals paid for office space. However, you do

not have to report these payments on Form 1099-MISC if you

paid them to a real estate agent or property manager. But the

real estate agent or property manager must use Form

1099-MISC to report the rent paid over to the property owner.

See Regulations section 1.6041-3(d) and Regulations

section 1.6041-1(e)(5), Example 5.

•

Machine rentals (for example, renting a bulldozer to level

your parking lot). If the machine rental is part of a contract

that includes both the use of the machine and the operator,

prorate the rental between the rent of the machine (report

that in box 1) and the operator's charge (report that on Form

1099-NEC in

box 1).

•

Pasture rentals (for example, farmers paying for the use of

grazing land).

Public housing agencies must report in box 1 rental

assistance payments made to owners of housing projects.

See Rev. Rul. 88-53, 1988-1 C.B. 384.

Coin-operated amusements. If an arrangement between

an owner of coin-operated amusements and an owner of a

business establishment where the amusements are placed is

a lease of the amusements or the amusement space, the

owner of the amusements or the owner of the space,

whoever makes the payments, must report the lease

payments in box 1 of Form 1099-MISC if the payments total

at least $600. However, if the arrangement is a joint venture,

the joint venture must file a Form 1065, U.S. Return of

Partnership Income, and provide each partner with the

information necessary to report the partner's share of the

taxable income. Coin-operated amusements include video

games, pinball machines, jukeboxes, pool tables, slot

machines, and other machines and gaming devices operated

by coins or tokens inserted into the machines by individual

users. For more information, see Rev. Rul. 92-49, 1992-1

C.B. 433.

Box 2. Royalties

Enter gross royalty payments (or similar amounts) of $10 or

more. Report royalties from oil, gas, or other mineral

properties before reduction for severance and other taxes

that may have been withheld and paid. Do not include

surface royalties. They should be reported in box 1. Do not

report oil or gas payments for a working interest in box 2;

CAUTION

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report payments for working interests in box 1 of Form

1099-NEC. Do not report timber royalties made under a

pay-as-cut contract; report these timber royalties on Form

1099-S.

Use box 2 to report royalty payments from intangible

property such as patents, copyrights, trade names, and

trademarks. Report the gross royalties (before reduction for

fees, commissions, or expenses) paid by a publisher directly

to an author or literary agent, unless the agent is a

corporation. The literary agent (whether or not a corporation)

that receives the royalty payment on behalf of the author

must report the gross amount of royalty payments to the

author on Form 1099-MISC whether or not the publisher

reported the payment to the agent on its Form 1099-MISC.

Box 3. Other Income

Enter other income of $600 or more required to be reported

on Form 1099-MISC that is not reportable in one of the other

boxes on the form.

Also enter in box 3 prizes and awards that are not for

services performed. Include the fair market value (FMV) of

merchandise won on game shows. Also include amounts

paid to a winner of a sweepstakes not involving a wager. If a

wager is made, report the winnings on Form W-2G.

If, not later than 60 days after the winner becomes

entitled to the prize, the winner can choose the option

of a lump sum or an annuity payable over at least 10

years, the payment of winnings is considered made when

actually paid. If the winner chooses an annuity, file Form

1099-MISC each year to report the annuity paid during that

year.

Do not include wages, any bonuses, prizes, and awards

paid to your employees. Report these on Form W-2. Do not

include in box 3 prizes and awards for services performed by

nonemployees, such as an award for the top commission

salesperson. Report them in

box 1 of Form 1099-NEC.

Prizes and awards received in recognition of past

accomplishments in religious, charitable, scientific, artistic,

educational, literary, or civic fields are not reportable if:

•

The winners are chosen without action on their part,

•

The winners are not expected to perform future services,

and

•

The payer transfers the prize or award to a charitable

organization or governmental unit under a designation made

by the recipient. See Rev. Proc. 87-54, 1987-2 C.B. 669.

Other items required to be reported in box 3 include the

following.

1. Payments as explained earlier under Deceased

employee's wages.

2. Payments as explained earlier under Indian gaming

profits, payments to tribal members.

3. A payment or series of payments made to individuals

for participating in a medical research study or studies.

4. Termination payments to former self-employed

insurance salespeople. These payments are not subject to

self-employment tax and are reportable in box 3 (rather than

box 1 of Form 1099-NEC) if all the following apply.

a. The payments are received from an insurance

company because of services performed as an insurance

salesperson for the company.

TIP

The payments are received after termination of the

salesperson's agreement to perform services for the

company.

c. The salesperson did not perform any services for the

company after termination and before the end of the year.

d. The salesperson enters into a covenant not to

compete against the company for at least 1 year after the

date of termination.

e. The amount of the payments depends primarily on

policies sold by the salesperson or credited to the

salesperson's account during the last year of the service

agreement or to the extent those policies remain in force for

some period after termination, or both.

f. The amount of the payments does not depend at all on

length of service or overall earnings from the company

(regardless of whether eligibility for payment depends on

length of service).

If the termination payments do not meet all these

requirements, report them in box 1 of Form 1099-NEC.

5. Generally, all punitive damages, any damages for

nonphysical injuries or sickness, and any other taxable

damages. Report punitive damages even if they relate to

physical injury or physical sickness. Generally, report all

compensatory damages for nonphysical injuries or sickness,

such as employment discrimination or defamation. However,

do not report damages (other than punitive damages):

a. Received on account of personal physical injuries or

physical sickness;

b. That do not exceed the amount paid for medical care

for emotional distress;

c. Received on account of nonphysical injuries (for

example, emotional distress) under a written binding

agreement, court decree, or mediation award in effect on or

issued by September 13, 1995; or

d. That are for a replacement of capital, such as

damages paid to a buyer by a contractor who failed to

complete construction of a building.

Damages received on account of emotional distress,

including physical symptoms such as insomnia, headaches,

and stomach disorders, are not considered received for a

physical injury or physical sickness and are reportable unless

described in item 5b or 5c above. However, damages

received on account of emotional distress due to physical

injuries or physical sickness are not reportable.

Also report liquidated damages received under the Age

Discrimination in Employment Act of 1967.

Taxable back pay damages may be wages and

reportable on Form W-2. See Pub. 957.

Foreign agricultural workers. Report in box 3

compensation of $600 or more paid in a calendar year to an

H-2A visa agricultural worker who did not give you a valid

TIN. You must also withhold federal income tax under the

backup withholding rules. For more information, go to

IRS.gov and enter “foreign agricultural workers” in the search

box.

Account reported under FATCA. If you are an foreign

financial institution (FFI) reporting pursuant to an election

described in Regulations section 1.1471-4(d)(5)(i)(A) a U.S.

account required to be reported under chapter 4 to which

during the year you made no payments reportable on an

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applicable Form 1099, enter zero in box 3. In addition, if you

are an FFI described in the preceding sentence and, during

the year, you made payments to the account required to be

reported under chapter 4, but those payments are not

reportable on an applicable Form 1099 (for example,

because the payment is under the applicable reporting

threshold), you must report the account on this Form

1099-MISC and enter zero in box 3.

Box 4. Federal Income Tax Withheld

Enter backup withholding. For example, persons who have

not furnished their TINs to you are subject to withholding on

payments required to be reported in boxes 1, 2 (net of

severance taxes), 3, 5 (only with respect to cash payments to

crew members for their share of proceeds from the catch), 6,

8, 9, and 10. For more information on backup withholding,

including the rate, see part N in the current year General

Instructions for Certain Information Returns.

Also enter any income tax withheld from payments to

members of Indian tribes from the net revenues of class II or

class III gaming activities conducted or licensed by the tribes.

Box 5. Fishing Boat Proceeds

If you are the operator of a fishing boat, enter the individual's

share of all proceeds from the sale of a catch or the FMV of a

distribution in kind to each crew member of fishing boats with

normally fewer than 10 crew members. A fishing boat has

normally fewer than 10 crew members if the average size of

the operating crew was fewer than 10 on trips during the

preceding 4 calendar quarters.

In addition, report cash payments of up to $100 per trip

that are contingent on a minimum catch and are paid solely

for additional duties (such as mate, engineer, or cook) for

which additional cash payments are traditional in the industry.

However, do not report on Form 1099-MISC any wages

reportable on Form W-2.

Box 6. Medical and Health Care Payments

Enter payments of $600 or more made in the course of your

trade or business to each physician or other supplier or

provider of medical or health care services. Include payments

made by medical and health care insurers under health,

accident, and sickness insurance programs. If payment is

made to a corporation, list the corporation as the recipient

rather than the individual providing the services. Payments to

persons providing health care services often include charges

for injections, drugs, dentures, and similar items. In these

cases, the entire payment is subject to information reporting.

You are not required to report payments to pharmacies for

prescription drugs.

The exemption from issuing Form 1099-MISC to a

corporation does not apply to payments for medical or health

care services provided by corporations, including

professional corporations. However, you are not required to

report payments made to a tax-exempt hospital or extended

care facility or to a hospital or extended care facility owned

and operated by the United States (or its territories), a state,

the District of Columbia, or any of their political subdivisions,

agencies, or instrumentalities.

Generally, payments made under a flexible spending

arrangement (as defined in section 106(c)(2)) or a

health reimbursement arrangement, which is treated

as employer-provided coverage under an accident or health

plan for purposes of section 106 are exempt from the

reporting requirements of section 6041.

Box 7. Payer Made Direct Sales Totaling $5,000

or More

Enter an “X” in the checkbox for sales by you totaling $5,000

or more of consumer products to a person on a buy-sell,

deposit-commission, or other commission basis for resale (by

the buyer or any other person) anywhere other than in a

permanent retail establishment. Do not enter a dollar amount

in this box.

You may either use box 7 on Form 1099-MISC or box 2 on

Form 1099-NEC to report the direct sales totaling $5,000 or

more. If you use Form 1099-NEC to report these sales, then

you are required to file the Form 1099-NEC with the IRS by

January 31.

Report these sales on only one form.

The report you must give to the recipient for these direct

sales need not be made on the official form. It may be in the

form of a letter showing this information along with

commissions, prizes, awards, etc.

Box 8. Substitute Payments in Lieu of Dividends

or Interest

Enter aggregate payments of at least $10 of substitute

payments received by a broker for a customer in lieu of

dividends or tax-exempt interest as a result of a loan of a

customer's securities. Substitute payment means a payment

in lieu of:

1. A dividend, or

2. Tax-exempt interest to the extent that interest

(including original issue discount) has accrued while the

securities were on a loan.

For this purpose, a customer includes an individual, trust,

estate, partnership, association, company, or corporation.

See Notice 2003-67, which is on page 752 of Internal

Revenue Bulletin 2003-40 at IRS.gov/irb/

2003-40_IRB#NOT-2003-67. It does not include a tax-exempt

organization, the United States, any state, the District of

Columbia, a U.S. territory, or a foreign government. File Form

1099-MISC with the IRS and furnish a copy to the customer

for whom you received the substitute payment.

Box 9. Crop Insurance Proceeds

Enter crop insurance proceeds of $600 or more paid to

farmers by insurance companies unless the farmer has

informed the insurance company that expenses have been

capitalized under section 278, 263A, or 447.

Box 10. Gross Proceeds Paid to an Attorney

Enter gross proceeds of $600 or more paid to an attorney in

connection with legal services (regardless of whether the

services are performed for the payer). See Payments to

attorneys, earlier.

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Box 11. Fish Purchased for Resale

If you are in the trade or business of purchasing fish for

resale, you must report total cash payments of $600 or more

paid during the year to any person who is engaged in the

trade or business of catching fish. You are required to keep

records showing the date and amount of each cash payment

made during the year, but you must report only the total

amount paid for the year on Form 1099-MISC.

"Fish" means all fish and other forms of aquatic life. "Cash"

means U.S. and foreign coin and currency and a cashier's

check, bank draft, traveler's check, or money order. Cash

does not include a check drawn on your personal or business

account.

Box 12. Section 409A Deferrals

You do not have to complete this box. For details, see Notice

2008-115, available at IRS.gov/irb/

2008-52_IRB#NOT-2008-115.

If you complete this box, enter the total amount deferred

during the year of at least $600 for the nonemployee under all

nonqualified plans. The deferrals during the year include

earnings on the current year and prior year deferrals. For

additional information, see Regulations sections 1.409A-1

through 1.409A-6. See the instructions for

box 15, later.

For deferrals and earnings under nonqualified deferred

compensation (NQDC) plans for employees, see the General

Instructions for Forms W-2 and W-3.

Box 13. FATCA Filing Requirement Checkbox

Check this box if you are a U.S. payer that is reporting on

Form(s) 1099 (including reporting payments on this Form

1099-MISC) as part of satisfying your requirement to report

with respect to a U.S. account for the purposes of chapter 4

of the Internal Revenue Code, as described in Regulations

section 1.1471-4(d)(2)(iii)(A). In addition, check the box if you

are an FFI reporting payments to a U.S. account pursuant to

an election described in Regulations section 1.1471-4(d)(5)

(i)(A). Finally, check the box if you are an FFI making the

election described in Regulations section 1.1471-4(d)(5)(i)

(A) and are reporting a U.S. account for chapter 4 purposes

to which you made no payments during the year that are

reportable on any applicable Form 1099 (or are reporting a

U.S. account to which you made payments during the year

that do not reach the applicable reporting threshold for any

applicable Form 1099).

Box 14. Excess Golden Parachute Payments

Enter any excess golden parachute payments. An excess

parachute payment is the amount over the base amount (the

average annual compensation for services includible in the

individual's gross income over the most recent 5 tax years).

See Q/A-38 through Q/A-44 of Regulations section 1.280G-1

for how to compute the excess amount.

See Golden parachute payments, later, for more

information.

Box 15. Nonqualified Deferred Compensation

Enter all amounts deferred (including earnings on amounts

deferred) that are includible in income under section 409A

because the NQDC plan fails to satisfy the requirements of

section 409A. Do not include amounts properly reported on a

Form 1099-MISC, corrected Form 1099-MISC, Form W-2, or

Form W-2c for a prior year. Also, do not include amounts that

are considered to be subject to a substantial risk of forfeiture

for purposes of section 409A. For additional information, see

Regulations sections 1.409A-1 through 1.409A-6; Notice

2008-113, available at IRS.gov/irb/

2008-51_IRB#NOT-2008-113; Notice 2008-115; Notice

2010-6, available at IRS.gov/irb/2010-03_IRB#NOT-2010-6;

and Notice 2010-80, available at IRS.gov/irb/

2010-51_IRB#NOT-2010-80.

Boxes 16–18. State Information

These boxes may be used by payers who participate in the

Combined Federal/State Filing Program and/or who are

required to file paper copies of this form with a state tax

department. See Pub. 1220 for more information regarding

the Combined Federal/State Filing Program. They are

provided for your convenience only and need not be

completed for the IRS. Use the state information boxes to

report payments for up to two states. Keep the information for

each state separated by the dash line. If you withheld state

income tax on this payment, you may enter it in box 16. In

box 17, enter the abbreviated name of the state and the

payer's state identification number. The state number is the

payer's identification number assigned by the individual state.

In box 18, you may enter the amount of the state payment.

If a state tax department requires that you send them a

paper copy of this form, use Copy 1 to provide information to

the state tax department. Give Copy 2 to the recipient for use

in filing the recipient's state income tax return.

Specific Instructions for Form

1099-NEC

File Form 1099-NEC, Nonemployee Compensation, for each

person in the course of your business to whom you have paid

the following during the year.

•

At least $600 in:

1. Services performed by someone who is not your

employee (including parts and materials) (box 1); or

2. Payments to an attorney (box 1). (See Payments to

attorneys, later.)

File Form 1099-NEC or Form 1099-MISC to report sales

totaling $5,000 or more of consumer products to a person on

a buy-sell, a deposit-commission, or other commission basis

for resale.

If you use Form 1099-NEC to report sales totaling

$5,000 or more, then you are required to file Form

1099-NEC with the IRS by January 31.

You must also file Form 1099-NEC for each person from

whom you have withheld any federal income tax (report in

box 4) under the backup withholding rules regardless of the

amount of the payment.

Be sure to report each payment in the proper box

because the IRS uses this information to determine

whether the recipient has properly reported the

payment.

Trade or business reporting only. Report on Form

1099-NEC only when payments are made in the course of

your trade or business. Personal payments are not

reportable. You are engaged in a trade or business if you

operate for gain or profit. However, nonprofit organizations

are considered to be engaged in a trade or business and are

subject to these reporting requirements. Other organizations

subject to these reporting requirements include trusts of

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qualified pension or profit-sharing plans of employers, certain

organizations exempt from tax under section 501(c) or

501(d), farmers' cooperatives that are exempt from tax under

section 521, and widely held fixed investment trusts.

Payments by federal, state, or local government agencies are

also reportable.

Reportable payments to corporations. The following

payments made to corporations must generally be reported

on Form 1099-NEC.

•

Attorneys' fees reported in box 1.

•

Payments by a federal executive agency for services

(vendors) reported in box 1.

Federal executive agencies may also have to file

Form 8596, Information Return for Federal Contracts,

and Form 8596-A, Quarterly Transmittal of

Information Returns for Federal Contracts, if a contracted

amount for personal services is more than $25,000. See Rev.

Rul. 2003-66, which is on page 1115 of Internal Revenue

Bulletin 2003-26 at

IRS.gov/pub/irs-irbs/irb03-26.pdf for

details.

Payments to attorneys. The term “attorney” includes a law

firm or other provider of legal services. Attorneys' fees of

$600 or more paid in the course of your trade or business are

reportable in

box 1 of Form 1099-NEC, under section

6041A(a)(1).

Gross proceeds paid to attorneys. Gross proceeds are

not reportable by you in box 1 of Form 1099-NEC. See the

Form 1099-MISC,

box 10, instructions, earlier.

Payments to corporations for legal services. The

exemption from reporting payments made to corporations

does not apply to payments for legal services. Therefore, you

must report attorneys' fees (in

box 1 of Form 1099-NEC) or

gross proceeds (in box 10 of Form 1099-MISC) as described

earlier to corporations that provide legal services.

Taxpayer identification numbers (TINs). To report

payments to an attorney on Form 1099-NEC, you must obtain

the attorney's TIN. You may use Form W-9 to obtain the

attorney's TIN. An attorney is required to promptly supply its

TIN whether it is a corporation or other entity, but the attorney

is not required to certify its TIN. If the attorney fails to provide

its TIN, the attorney may be subject to a penalty under

section 6723 and its regulations, and you must backup

withhold on the reportable payments.

Independent contractor or employee. Generally, you

must report payments to independent contractors on Form

1099-NEC in

box 1. See the instructions for box 1.

Section 530 of the Revenue Act of 1978, as extended

by section 269(c) of P.L. 97-248, deals with the

employment tax status of independent contractors

and employees. To qualify for relief under section 530,

employers must file Form 1099-NEC. Additional requirements

for relief are discussed in Rev. Proc. 85-18, 1985-1 C.B. 518.

Also see Pub. 15-A for special rules that may apply to

technical service specialists and test proctors and room

supervisors.

Transit passes and parking for independent contrac-

tors. Although you cannot provide qualified transportation

fringes to independent contractors, the working condition and

de minimis fringe rules for transit passes and parking apply to

independent contractors. Tokens or farecards that enable an

independent contractor to commute on a public transit

system (not including privately operated van pools) are

CAUTION

TIP

excludable from the independent contractor's gross income

and are not reportable on Form 1099-NEC if their value in any

month is $21 or less. However, if the value of a pass provided

in a month is greater than $21, the full value is part of the

gross income and must be reported on Form 1099-NEC. The

value of parking may be excludable from an independent

contractor's gross income, and, therefore, not reportable on

Form 1099-NEC if certain requirements are met. See

Regulations section 1.132-9(b), Q/A-24.

Directors' fees. You must report directors' fees and other

remuneration, including payments made after retirement, on

Form 1099-NEC in the year paid. Report them in box 1.

Commissions paid to lottery ticket sales agents. A state

that has control over and responsibility for online and instant

lottery games must file Form 1099-NEC to report

commissions paid, whether directly or indirectly, to licensed

sales agents. For example, State X retains control over and

liability for online and instant lottery games. For online ticket

sales, State X pays commissions by allowing an agent to

retain 5% of the ticket proceeds the agent remits to State X.

For instant ticket sales, State X pays commissions by

providing tickets to the agent for 5% less than the proceeds

to be obtained by the agent from the sale of those tickets. If

the commissions for the year total $600 or more, they must

be reported in

box 1 of Form 1099-NEC. See Rev. Rul. 92-96,

1992-2 C.B. 281.

Payments made on behalf of another person. For

payments reportable under section 6041, if you make a

payment on behalf of another person who is the source of the

funds, you may be responsible for filing Form 1099-NEC. You

are the payor for information reporting purposes if you

perform management or oversight functions in connection

with the payment, or have a significant economic interest in

the payment (such as a lien). For example, a bank that

provides financing to a real estate developer for a

construction project maintains an account from which it

makes payments for services in connection with the project.

The bank performs management and oversight functions

over the payments and is responsible for filing information

returns for payments of $600 or more paid to contractors. For

more information, see Regulations section 1.6041-1(e).

Exceptions

Some payments do not have to be reported on Form

1099-NEC, although they may be taxable to the recipient.

Payments for which a Form 1099-NEC is not required include

all of the following.

•

Generally, payments to a corporation (including a limited

liability company (LLC) that is treated as a C or S

corporation). However, see Reportable payments to

corporations, earlier.

•

Payments for merchandise, telegrams, telephone, freight,

storage, and similar items.

•

Payments of rent to real estate agents or property

managers. However, the real estate agent or property

manager must use Form 1099-MISC to report the rent paid

over to the property owner. See Regulations section

1.6041-3(d); Regulations section 1.6041-1(e)(5), Example 5;

and the instructions for

box 1.

•

Wages, any bonuses, prizes, and awards paid to

employees (report these on Form W-2).

•

Military differential wage payments made to employees

while they are on active duty in the U.S. Armed Forces or

other uniformed services (report on Form W-2).

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•

Business travel allowances paid to employees (may be

reportable on Form W-2).

•

Cost of current life insurance protection (report on Form

W-2 or Form 1099-R).

•

Payments to a tax-exempt organization including

tax-exempt trusts (IRAs, HSAs, Archer MSAs, Coverdell

ESAs, and ABLE (529A) accounts), the United States, a

state, the District of Columbia, a U.S. territory, or a foreign

government.

•

Payments made to or for homeowners from the HFA

Hardest Hit Fund or similar state program (report on Form

1098-MA).

•

Compensation for injuries or sickness by the Department

of Justice as a PSO disability or survivor's benefit, or under a

state program that provides benefits for surviving dependents

of a PSO who has died as the direct and proximate result of a

personal injury sustained in the line of duty.

•

Compensation for wrongful incarceration for any criminal

offense for which there was a conviction under federal or

state law. See section 139F, Certain amounts received by

wrongfully incarcerated individuals.

State or local sales taxes. If state or local sales taxes are

imposed on the service provider and you (as the buyer) pay

them to the service provider, report them on Form 1099-NEC

as part of the reportable payment. However, if sales taxes are

imposed on you (as the buyer) and collected from you by the

service provider, do not report the sales taxes on Form

1099-NEC.

Form 1099-K. Payments made with a credit card or payment

card and certain other types of payments, including

third-party network transactions, must be reported on Form

1099-K by the payment settlement entity under section

6050W and are not subject to reporting on Form 1099-NEC.

See the separate Instructions for Form 1099-K.

Fees paid to informers. A payment to an informer as an

award, fee, or reward for information about criminal activity

does not have to be reported if the payment is made by a

federal, state, or local government agency, or by a nonprofit

organization exempt from tax under section 501(c)(3) that

makes the payment to further the charitable purpose of

lessening the burdens of government. For more information,

see Regulations section 1.6041-3(l).

Scholarships. Do not use Form 1099-NEC to report

scholarship or fellowship grants. Scholarship or fellowship

grants that are taxable to the recipient because they are paid

for teaching, research, or other services as a condition for

receiving the grant are considered wages and must be

reported on Form W-2. Other taxable scholarship or

fellowship payments (to a degree or nondegree candidate)

do not have to be reported to the IRS on any form, unless

section 6050S requires reporting of such amounts by an

educational institution on Form 1098-T. See section 117(b)–

(d) and Regulations section 1.6041-3(n) for more information.

Difficulty-of-care payments. Do not use Form 1099-NEC

to report difficulty-of-care payments that are excludable from

the recipient's gross income. Difficulty-of-care payments to

foster care providers are not reportable if paid for fewer than

11 children under age 19 and fewer than six individuals age

19 or older. See section 131(c). Amounts paid for more than

10 children or more than five other individuals are reportable

on Form 1099-NEC.

Certain Medicaid waiver payments may be excludable

from income as difficulty-of-care payments. For more

information, see Notice 2014-7, available at IRS.gov/irb/

2014-4_IRB#NOT-2014-7

; and Medicaid waiver payments

frequently asked questions (FAQs), available at

IRS.gov/

Individuals/Certain-Medicaid-Payments-May-Be-Excludable-

From-Income.

Canceled debt. A canceled debt is not reportable on Form

1099-NEC. Canceled debts reportable under section 6050P

must be reported on Form 1099-C. See the Instructions for

Forms 1099-A and 1099-C.

Employee business expense reimbursements. Do not

use Form 1099-NEC to report employee business expense

reimbursements. Report payments made to employees under

a nonaccountable plan as wages on Form W-2. Generally,

payments made to employees under an accountable plan are

not reportable on Form W-2, except in certain cases when

you pay a per diem or mileage allowance. For more

information, see the General Instructions for Forms W-2 and

W-3, and Pub. 463. For information on reporting employee

moving expense reimbursements on Form W-2, see the

General Instructions for Forms W-2 and W-3.

Statements to Recipients

If you are required to file Form 1099-NEC, you must furnish a

statement to the recipient. For more information about the

requirement to furnish a statement to each recipient, and

truncation, see part M in the current year General Instructions

for Certain Information Returns.

You can furnish each recipient with a single payee

statement reporting all Form 1099-NEC payment types. You

are required to furnish the payee statements and file with the

IRS by January 31.

Truncating recipient’s TIN on payee statements.

Pursuant to Regulations section 301.6109-4, all filers of this

form may truncate a recipient’s TIN (social security number

(SSN), individual taxpayer identification number (ITIN),

adoption taxpayer identification number (ATIN), or employer

identification number (EIN)) on payee statements. Truncation

is not allowed on any documents the filer files with the IRS. A

payer's TIN may not be truncated on any form. See part J in

the current year General Instructions for Certain Information

Returns.

2nd TIN Not.

You may enter an “X” in this box if you were notified by the

IRS twice within 3 calendar years that the payee provided an

incorrect TIN. If you mark this box, the IRS will not send you

any further notices about this account.

However, if you received both IRS notices in the same

year, or if you received them in different years but they both

related to information returns filed for the same year, do not

check the box at this time. For purposes of the

two-notices-in-3-years rule, you are considered to have

received one notice and you are not required to send a

second “B” notice to the taxpayer on receipt of the second

notice. See part N in the current year General Instructions for

Certain Information Returns for more information.

For information on the TIN Matching System offered

by the IRS, see the current year General Instructions

for Certain Information Returns.

Corrections to Form 1099-NEC

If you need to correct a Form 1099-NEC that you have

already sent to the IRS:

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•

For paper forms, see part H in the current year General

Instructions for Certain Information Returns; or

•

For electronic corrections, see Pub. 1220.

If you are filing a correction on a paper form, do not

check the VOID box on the form. A checked VOID

box alerts IRS scanning equipment to ignore the form

and proceed to the next one. Your correction will not be

entered into IRS records if you check the VOID box.

Recipient's TIN

Enter the recipient's TIN using hyphens in the proper format.

SSNs, ITINs, and ATINs should be in the XXX-XX-XXXX

format. EINs should be in the XX-XXXXXXX format.

You should make every effort to ensure that you have

the correct type of number reported in the correct

format.

Account Number

The account number is required if you have multiple accounts

for a recipient for whom you are filing more than one Form

1099-NEC. See part L in the current year General

Instructions for Certain Information Returns.

Box 1. Nonemployee Compensation

Enter nonemployee compensation (NEC) of $600 or more.

Include fees, commissions, prizes and awards for services

performed as a nonemployee, and other forms of

compensation for services performed for your trade or

business by an individual who is not your employee. Include

oil and gas payments for a working interest, whether or not

services are performed. Also include expenses incurred for

the use of an entertainment facility that you treat as

compensation to a nonemployee. Federal executive agencies

that make payments to vendors for services, including

payments to corporations, must report the payments in this

box. See Rev. Rul. 2003-66.

What is NEC? If the following four conditions are met, you

must generally report a payment as NEC.

•

You made the payment to someone who is not your

employee.

•

You made the payment for services in the course of your

trade or business (including government agencies and

nonprofit organizations).

•

You made the payment to an individual, partnership,

estate, or, in some cases, a corporation.

•

You made payments to the payee of at least $600 during

the year.

Self-employment tax. Generally, amounts paid to

individuals that are reportable in box 1 are subject to

self-employment tax. If payments to individuals are not

subject to this tax, report the payments in box 3 of Form

1099-MISC. However, report section 530 (of the Revenue Act

of 1978) worker payments in box 1 of Form 1099-NEC.

Examples. The following are some examples of payments

to be reported in

box 1.

•

Professional service fees, such as fees to attorneys

(including corporations), accountants, architects, contractors,

engineers, etc.

•

Fees paid by one professional to another, such as

fee-splitting or referral fees.

•

Payments by attorneys to witnesses or experts in legal

adjudication.

CAUTION

•

Payment for services, including payment for parts or

materials used to perform the services if supplying the parts

or materials was incidental to providing the service. For

example, report the total insurance company payments to an

auto repair shop under a repair contract showing an amount

for labor and another amount for parts, if furnishing parts was

incidental to repairing the auto.

•

Commissions paid to nonemployee salespersons that are

subject to repayment but not repaid during the calendar year.

•

A fee paid to a nonemployee, including an independent

contractor, or travel reimbursement for which the

nonemployee did not account to the payer, if the fee and

reimbursement total at least $600. To help you determine

whether someone is an independent contractor or an

employee, see Pub. 15-A.

•

Payments to nonemployee entertainers for services. Use

Form 1042-S, Foreign Person's U.S. Source Income Subject

to Withholding, for payments to nonresident aliens.

•

Exchanges of services between individuals in the course

of their trades or businesses. For example, an attorney

represents a painter for nonpayment of business debts in

exchange for the painting of the attorney's law offices. The

amount reportable by each on Form 1099-NEC is the FMV of

their own services performed. However, if the attorney

represents the painter in a divorce proceeding, this is an

activity that is unrelated to the painter's trade or business.

The attorney must report on Form 1099-NEC the value of

their services. But the painter need not report on Form

1099-NEC the value of painting the law offices because the

work is in exchange for legal services that are separate from

the painter's business.

•

Taxable fringe benefits for nonemployees. For information

on the valuation of fringe benefits, see Pub. 15-B.

•

Gross oil and gas payments for a working interest.

•

Payments to an insurance salesperson who is not your

common law or statutory employee. See Pub. 15-A for the

definition of employee. However, for termination payments to

former insurance salespeople, see the instructions for

box 3

of Form 1099-MISC.

•

Directors' fees as explained under Directors' fees, earlier.

•

Commissions paid to licensed lottery ticket sales agents

as explained under Commissions paid to lottery ticket sales

agents, earlier.

•

Payments to section 530 (of the Revenue Act of 1978)

workers. See the TIP under Independent contractor or

employee, earlier.

Golden parachute payments. A parachute payment is any

payment that meets all of the following conditions.

1. The payment is in the nature of compensation.

2. The payment is to, or for the benefit of, a disqualified

individual. A disqualified individual is one who at any time

during the 12-month period prior to and ending on the date of

the change in ownership or control of the corporation (the

disqualified individual determination period) was an

employee or independent contractor and was, in regard to

that corporation, a shareholder, an officer, or a highly

compensated individual.

3. The payment is contingent on a change in the

ownership of a corporation, the effective control of a

corporation, or the ownership of a substantial portion of the

assets of a corporation (a change in ownership or control).

4. The payment has (together with other payments

described in (1), (2), and (3), above, made to the same

individual) an aggregate present value of at least three times

the individual's base amount.

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Instr. for Forms 1099-MISC and 1099-NEC (Rev. 01-2024)

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The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

For more details, see Regulations section 1.280G-1. Also,

see Rev. Proc. 2003-68, which is on page 398 of Internal

Revenue Bulletin 2003-34 at

IRS.gov/irb/

2003-34_IRB#RP-2003-68, concerning the valuation of stock

options for purposes of golden parachute payment rules. For

the treatment of unvested shares of restricted stock, see Rev.

Rul. 2005-39, available at IRS.gov/irb/

2005-27_IRB#RR-2005-39.

Independent contractor. Enter in box 1 the total

compensation, including any golden parachute payment. For

excess golden parachute payments, see the instructions for

box 14 of Form 1099-MISC.

For employee reporting of these payments, see Pub. 15-A.

Payments not reported in box 1. Do not report in box 1:

•

Expense reimbursements paid to volunteers of nonprofit

organizations;

•

Deceased employee wages paid in the year after death

(report in box 3 of Form 1099-MISC) (see Deceased

employee's wages, earlier);

•

Payments more appropriately described as rent (report in

box 1 of Form 1099-MISC), royalties (report in box 2 of Form

1099-MISC), other income not subject to self-employment

tax (report in

box 3 of Form 1099-MISC), and interest (use

Form 1099-INT);

•

The cost of current life insurance protection (report on

Form W-2 or Form 1099-R);

•

An employee's wages, travel or auto allowance, or

bonuses and prizes (report on Form W-2); and

•

The cost of group-term life insurance paid on behalf of a

former employee (report on Form W-2).

Box 2. Payer Made Direct Sales Totaling $5,000

or More

Enter an "X" in the checkbox for sales by you totaling $5,000

or more of consumer products to a person on a buy-sell,

deposit-commission, or other commission basis for resale (by

the buyer or any other person) anywhere other than in a

permanent retail establishment. Do not enter a dollar amount

in this box.

You may either use box 2 on Form 1099-NEC or

box 7 on

Form 1099-MISC to report the direct sales totaling $5,000 or

more. If you use Form 1099-NEC to report these sales, then

you are required to file the Form 1099-NEC with the IRS by

January 31.

Report these sales on only one form.

The report you must give to the recipient for these direct

sales need not be made on the official form. It may be in the

form of a letter showing this information along with

commissions, prizes, awards, etc.

Box 4. Federal Income Tax Withheld

Enter backup withholding. For example, persons who have

not furnished their TINs to you are subject to withholding on

payments required to be reported in box 1. For more

information on backup withholding, including the rate, see

part N in the current year General Instructions for Certain

Information Returns.

Boxes 5–7. State Information

These boxes are provided for your convenience only and

need not be completed for the IRS. Use the state information

boxes to report payments for up to two states. Keep the

information for each state separated by the dash line. If you

withheld state income tax on this payment, you may enter it in

box 5. In box 6, enter the abbreviated name of the state and

the payer's state identification number. In box 7, you may

enter the amount of the state payment.

If a state tax department requires that you send them a

paper copy of this form, use Copy 1 to provide information to

the state tax department. Give Copy 2 to the recipient for use

in filing the recipient's state income tax return.

CAUTION

Instr. for Forms 1099-MISC and 1099-NEC (Rev. 01-2024)

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Index

Agricultural workers, foreign 5

Armed Forces 3, 8

Attorneys' fees and gross

proceeds 2, 6, 8, 10

Backup withholding 2, 6, 8, 11

Broker transactions 1, 6

Canceled debt 3, 9

Coin-operated amusements 4

Commissions 8, 10

Construction project, escrow

agent 3, 8

Consumer products totaling $5,000,

indicator for 1

Corporations, payments to 2, 8, 10

Corrections 4, 9

Crop insurance proceeds 1, 6

Damages 5

Deceased employee's wages 2, 6, 11

Difficulty-of-care payments 9

Direct sales of consumer products for

resale 1

Direct Sales totaling $5,000 11

Directors' fees 8, 10

Excess golden parachute payments 7

Exchange of services 10

FATCA filing requirements 4, 5, 7, 10

Fees 1, 3, 7-10

Fish purchases for cash 6

Fish purchases for resale 7

Fishing boat proceeds 6

Foreign agricultural workers 5

Form 1099-K 3, 9

Form W-9 2, 8

Former insurance salesperson,

termination payments 5, 6, 10, 11

Golden parachute payments 10

Gross proceeds, attorneys 2, 6, 8, 10

Health care services, payments 1, 6,

Independent contractor payments 8,

Indian gaming profits 3

Informants, fees 3, 9

Lottery ticket agents, commissions 8,

Medical payments 9

Medical research payments 5

Medical services payments 6

Military differential payments 3, 8

Miscellaneous information 1

Nonemployee compensation 7

Nonemployee compensation

(NEC) 10

Nonqualified deferred

compensation 7

Other income 5

Parking, value of 8

Payment card transactions 3, 6, 8, 11

Prizes and awards 5

Punitive damages 5

Rents 1, 4

Resale of fishes 7

Royalties 1, 4

Sale of fish to reseller by fishing boat

operator 1

Scholarships 3, 9

Section 409A deferrals 7

Section 409A income 7

Section 530 worker 8, 10

Self-employment tax 10

State and local sales taxes 9

State Information 7, 11

Substitute payments in lieu of

dividends or tax-exempt interest 1,

Taxpayer identification number 2, 8

Termination payments, insurance

salespeople 5, 10

Trade or business 2, 7

Transit passes 8

Withholding:

Backup 2, 6, 8, 11

Indian gaming 3, 6, 11

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