1099-NEC vs 1099-MISC: Which form for which payment
Michel Myara is co-founder and product designer at looch, where he designs the tools small businesses use to get paid, manage spend, and run their books.
Updated August 2026
Services go on the 1099-NEC, almost everything else on the 1099-MISC, and the thresholds are not all $2,000
The clean split: Payments to non-employees for services belong on Form 1099-NEC, and rents, royalties, prizes, medical payments, and attorney settlement proceeds belong on Form 1099-MISC. The $2,000 reporting threshold that took effect for payments made after December 31, 2025 covers most boxes, but not all of them, per the IRS Instructions for Forms 1099-MISC and 1099-NEC (Rev. December 2026):
| Payment | Form and box | Threshold |
|---|---|---|
| Nonemployee compensation (services) | 1099-NEC, box 1a | $2,000 |
| Attorney fees for legal services | 1099-NEC, box 1a | $2,000 |
| Gross proceeds paid to an attorney | 1099-MISC, box 10 | $600 |
| Rents | 1099-MISC, box 1 | $2,000 |
| Royalties | 1099-MISC, box 2 | $10 |
| Prizes and awards (not for services) | 1099-MISC, box 3 | $2,000 |
| Medical and health care payments | 1099-MISC, box 6 | $2,000 |
The deadlines differ too: The 1099-NEC is due to the IRS and the recipient by January 31, while the 1099-MISC is filed by February 28 on paper or March 31 electronically. For tax year 2026 forms, both January 31st and February 28th, 2027 fall on a Sunday, so those dates shift to Monday, February 1st and Monday, March 1st, 2027.
Last verified: August 26th, 2026.
Who has to file at all, what the manual process looks like, and what filing costs live in our main guide to filing 1099s. This page settles the narrower question that follows: You know a payment is reportable, so which form does it go on, and at what floor.
The rule of thumb, and why it exists
Form 1099-NEC exists for one thing: Nonemployee compensation, meaning payments of $2,000 or more for services performed by someone who is not your employee, in the course of your trade or business. Fees, commissions, and prizes or awards for services performed all land in box 1a. If you hired a contractor, a freelancer, a designer, or a consultant, their form is the NEC.
Form 1099-MISC is the catch-all for the reportable payments that are not compensation for services: Rent for your office, royalties on a license, a prize that was not payment for work, payments to physicians in the course of business, and the attorney case below. Before 2020 all of this lived on one form; the IRS split nonemployee compensation back onto its own form, with its own earlier deadline, and the split is exactly where the mistakes happen.
If the payee is foreign, the form question changes before it starts: A foreign payee generally documents itself with a W-8 rather than a W-9, which we cover in W-8BEN-E or W-9: Which form applies.
The thresholds that survived the $2,000 change
For payments made after December 31, 2025, the reporting threshold on most boxes rose from $600 to $2,000, and the IRS notes the figure may be adjusted for inflation beginning in 2027. Stop there and two boxes come out wrong, because two floors did not move:
Royalties report at $10. Box 2 of the 1099-MISC keeps its $10 floor. Ten dollars, not a typo. A $50 royalty payment that would never come close to the general threshold is still reportable.
Attorney gross proceeds report at $600. Box 10 of the 1099-MISC kept its $600 floor, because it is governed by a different code section than the one the threshold change amended. The details are in the attorney section below.
Everything in the table above comes from the boxes’ own instructions in the December 2026 revision, which is the revision that governs tax year 2026 forms filed in early 2027.
The attorney split, the trap inside the trap
Payments involving lawyers are the one place a single vendor can require either form, at two different thresholds, depending on what the money was for:
- Attorney fees, meaning you paid a lawyer for legal services, go on the 1099-NEC in box 1a once they reach $2,000 in the year.
- Gross proceeds paid to an attorney, meaning money that passed through a lawyer in connection with legal services, such as a settlement check paid to a claimant’s attorney, go on the 1099-MISC in box 10 once they reach $600, regardless of whether the services were performed for you.
Two more wrinkles make this the box people get wrong. First, the usual corporate exemption does not apply: Payments to a law firm are reportable even if the firm is a corporation. Second, the same instructions that exclude gross proceeds from the NEC require the fees on it, so a business that settled a dispute and also paid its own counsel may owe both forms for the same year.
Edge cases worth knowing
Direct sales of $5,000 or more. If you sold $5,000 or more of consumer products to someone for resale outside a permanent retail establishment, you check a box rather than enter an amount, on either form, but only one of them. If you use the 1099-NEC for it, the January 31 filing date applies.
Backup withholding overrides every threshold. If you withheld federal income tax under the backup withholding rules, you file the form for that payee regardless of the payment amount, even $50 below every floor.
Ten or more returns means e-filing. The electronic filing mandate counts your information returns in aggregate across form types, and at 10 or more you must file electronically.
Two forms, two deadlines
The forms do not share a calendar, and the gap is not small:
- 1099-NEC: Both the IRS copy and the recipient copy are due by January 31, on paper or electronically. When that date falls on a weekend, the deadline is the next business day, and January 31st, 2027 is a Sunday, so tax year 2026 forms are due Monday, February 1st, 2027.
- 1099-MISC: The recipient copy is due by January 31, but the IRS filing is due February 28 on paper or March 31 electronically. The same weekend rule applies, and February 28th, 2027 is also a Sunday, so a paper 1099-MISC for tax year 2026 is due Monday, March 1st, 2027, while the electronic date stays Wednesday, March 31st, 2027.
Missing either date costs per form, not per filing, and the tiers escalate through the year: The full schedule, including the separate penalty for the recipient copy, is in the 1099 late filing penalty.
Where looch fits
The form split is a sorting problem, and sorting a year of payments by hand is where the errors come from. looch AI makes the 1099 determination from your actual transactions, identifying which payments are reportable and which to leave out, and at tax season files each 1099 instantly for $2 per filing, published on the looch pricing page. If a payment is genuinely ambiguous, a settlement with mixed fee and proceeds components, a payee whose classification is unclear, or anything multi-state and unusual, that is a question for a CPA or enrolled agent, not a form-picker.
Sources: Instructions for Forms 1099-MISC and 1099-NEC (Rev. December 2026) for every box threshold and filing date above, and the IRS Form 1099-NEC and independent contractors FAQ for the payments-after-December-31st-2025 effective date. Verified August 26th, 2026.
