1099-MISC vs 1099-NEC: Which Form Do You Get and What's the Difference?
February 25, 2026 · Published by Soxoa
Put this guide into practice
See representative 1099 fields, compare the output with the source, then choose the workflow you need.
What Changed in 2020
Before 2020, all non-employee compensation (payments to freelancers, contractors, gig workers) was reported in Box 7 of Form 1099-MISC. Starting with the 2020 tax year, the IRS brought back the Form 1099-NEC (Non-Employee Compensation) specifically for contractor payments. This split reporting into two forms with different purposes.
Form 1099-NEC: For Contractor/Freelance Income
You receive a 1099-NEC when:
- You were paid $600+ as a non-employee (freelancer, contractor, gig worker)
- You provided services — not goods
- The payer is a business (not an individual paying for personal services)
Box 1 (NEC): Your total non-employee compensation. This goes on Schedule C as business income.
Box 4: Federal income tax withheld (rare for contractors, but possible)
Form 1099-MISC: For Other Types of Income
1099-MISC still exists — it now covers:
- Box 1: Rents — rental income you received
- Box 2: Royalties — book, music, oil/gas royalties
- Box 3: Other income — prizes, awards, legal settlements
- Box 6: Medical payments — payments to physicians/healthcare providers
- Box 10: Crop insurance proceeds
Quick Comparison
| Form | Who Gets It | Tax Treatment |
|---|---|---|
| 1099-NEC | Freelancers, contractors, gig workers | Schedule C → self-employment tax applies |
| 1099-MISC | Landlords, royalty recipients, prize winners | Varies by box — some on Schedule E, some ordinary income |
Do You Owe Self-Employment Tax on 1099-NEC Income?
Yes. Income reported on a 1099-NEC is subject to self-employment tax (15.3% on net earnings) in addition to regular income tax. You can deduct half of self-employment tax from your income, and you may be able to deduct business expenses to reduce the taxable amount.