Form 1099-NEC
IRS information return for non-employee compensation paid to US persons.
Definition
Form 1099-NEC reports $600+ of non-employee compensation paid to a US person during the calendar year. Filed by US payers; recipient (typically an independent contractor) uses it for personal tax return.
Context
Relevant when a Delaware LLC pays a US-resident contractor $600+ in a year. Not relevant for payments to non-US persons (who receive Form 1042-S instead).
Example
A Delaware LLC owner pays a US-based designer $2,500 for branding work. The LLC issues Form 1099-NEC to the designer by January 31 and files copies with the IRS.
Common pitfalls
- Deadline: recipient by January 31, IRS by February 28 (paper) or March 31 (electronic).
- Penalties for late filing scale with delay.