The 1099 family
Form 1099 is not one form — it is a family. The IRS uses it to track non-wage income. Every 1099 variant has the same job: tell the recipient and the IRS that money changed hands, so the recipient can report it on their tax return.
The most common variants are:
• 1099-NEC — Nonemployee Compensation. Issued to independent contractors, freelancers, and gig workers. Threshold: $600 from one payer.
• 1099-MISC — Miscellaneous Income. Rent, prizes, awards, royalties, legal settlements. Threshold: usually $600.
• 1099-K — Payment Card and Third Party Network Transactions. Issued by PayPal, Venmo, Stripe, credit-card processors. Threshold in 2025: $5,000 (dropping to $2,500 in 2026, $600 in 2027).
• 1099-INT — Interest income from a bank. Threshold: $10.
• 1099-DIV — Dividends. Threshold: $10.
• 1099-R — Retirement plan distributions.
• 1099-B — Broker and barter exchange transactions (stock and crypto sales).
• 1099-G — Government payments including unemployment.
1099-NEC vs W-2
A 1099-NEC is for independent contractors — self-employed people the payer does not control. The payer does not withhold tax, does not pay FICA match, and does not offer benefits. The contractor gets the full gross and owes federal income tax plus 15.3% self-employment tax on the entire amount.
A W-2 is for employees — the employer withholds tax, pays the FICA match, and provides workplace protections. Getting one form vs the other has big financial consequences and the classification is legally defined by IRS common-law rules, not by what the payer wants to call you.
When you get a 1099 and what to do with it
Payers must send 1099s to recipients by January 31 (for 1099-NEC and most others). Some variants have later dates — 1099-B and 1099-DIV are due by February 15.
When you receive a 1099, add the reported amount to your income on the appropriate Schedule (Schedule C for self-employment, Schedule B for interest and dividends, Schedule E for rental, Schedule D for stock sales). Even if you never receive a 1099 you should have — the IRS says you still owe tax on the underlying income.