TAX YEAR

2021
Form 1099-MISC
and Form 1099-NEC
Reporting
Save $
And Experience
The Difference
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Use Form 1099-NEC, Nonemployee Compensation, to report Who must file? File Form 1099-MISC, Miscellaneous In-
nonemployee compensation payments. These payments come, for each person to whom you have paid during the
are no longer reported on Form 1099-MISC, Miscellaneous year:
Income. See Nonemployee compensation, next page. • At least $10 in royalties or broker payments in lieu of
dividends or tax-exempt interest,
• At least $600 in:
Trade or Business Reporting Only
– Rents,
Report on Form 1099-MISC or Form 1099-NEC only when – Prizes and awards,
payments are made in the course of your trade or business. – Other income payments,
Personal payments are not reportable. You are engaged in – Medical and health care payments,
a trade or business if you operate for gain or profit. How- – Crop insurance proceeds,
ever, nonprofit organizations are considered to be engaged – Generally, the cash paid from a notional principal
in a trade or business and are subject to these reporting re- contract to an individual, partnership, or estate,
quirements. Other organizations subject to these reporting – Gross proceeds to an attorney. See Payments to
requirements include trusts of qualified pension or prof- Attorneys, next page,
it-sharing plans of employers, certain organizations exempt – Any fishing boat proceeds,
from tax under IRC section 501(c) or 501(d), farmers’ cooper- – Cash payments for fish (or other aquatic life) you pur-
atives that are exempt from tax under IRC section 521, and chase from anyone engaged in the trade or business of
widely held fixed investment trusts. Payments by federal, catching fish,
state, or local government agencies are also reportable. – IRC section 409A deferrals, or
Exceptions: Some payments do not have to be reported on – Nonqualified deferred compensation.
Form 1099-MISC or Form 1099-NEC, although they may be In addition, use Form 1099-MISC to report that you made
taxable to the recipient. Payments for which a Form 1099- direct sales of at least $5,000 of consumer products to a
MISC or Form 1099-NEC is not required include payments buyer for resale anywhere other than a permanent retail
to a corporation (including a limited liability company establishment.
(LLC) that is treated as a C or S corporation). But see Re-
Withholding. You must also file Form 1099-MISC for each
portable Payments to Corporations, next column.
person from whom you have withheld any federal income
tax under the backup withholding rules regardless of the
Form 1099-MISC, Miscellaneous Income, amount of the payment.
Reporting
Reportable Payments to Corporations on
2021 filing due date. Form 1099-MISC is due to the IRS by Form 1099-MISC
February 28, 2022, if filing by paper, or March 31, 2022, if fil- The following payments made to corporations generally
ing electronically. The due date for furnishing statements to must be reported on Form 1099-MISC.
payees is January 31, 2022.
 Form 1099-MISC
Payments to Attorneys
and Form 1099-NEC
Reporting 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 on box 1 of
• Cash payments for the purchase of fish for resale,
Form 1099-NEC.
• Medical and health care payments,
• Gross proceeds paid to an attorney, and Gross proceeds paid to attorneys. Report in box 10 of
• Substitute payments in lieu of dividends or tax-exempt Form 1099-MISC payments that:
interest. • 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
Form 1099-NEC, Nonemployee
agreement,
Compensation, Reporting • Total $600 or more, and
2021 filing due date. Form 1099-NEC is due to the IRS and • Are not reportable by you in box 1, Form 1099-NEC.
the payee by January 31, 2022. Payments to corporations for legal services. The exemp-
Who must file? File Form 1099-NEC for each person to tion from reporting payments made to corporations does
whom you have paid at least $600 during the year for: not apply to payments for legal services. Therefore, you
• Services performed by someone who is not your employee must report attorneys’ fees (in box 1, Form 1099-NEC) or
(including parts and materials), or gross proceeds (in box 10, Form 1099-MISC) as described
• Payments to an attorney. See Payments to Attorneys, next earlier to corporations that provide legal services.
column.
Nonemployee compensation. Includes fees, commissions, Penalties
prizes, awards, and other forms of compensation for ser- If you fail to file correct information returns and/or furnish
vices performed by a nonemployee as well as taxable fringe correct payee statements by the due date and you cannot
benefits. Includes professional service fees, such as fees show reasonable cause, you may be subject to a penalty.
to attorneys (including corporations), accountants, archi- The penalty for late filing or furnishing within 30 days of
tects, contractors, or engineers, and directors’ fees. Includes the due date is $50 per return, with a maximum penalty of
fee-splitting or referral fees paid by one professional to an- $571,000. Taxpayers who show intentional disregard of the
other and exchanges of services between individuals in the filing requirements can be assessed a penalty of $570 per
course of their trades or businesses. Includes oil and gas return, with no maximum amount of penalties.
payments for a working interest, whether or not services
are performed. A penalty for failure to file a correct information return is
separate from the penalty for failure to furnish the correct
Withholding. You must also file Form 1099-NEC for each payee statement. For example, if you fail to file a correct
person from whom you have withheld any federal income Form 1099-MISC with the IRS and do not provide a correct
tax under the backup withholding rules regardless of the Form 1099-MISC statement to the payee, you may be sub-
amount of the payment. ject to two separate penalties.
Reportable Payments to Corporations on
Form 1099-NEC
The following payments made to corporations generally Contact Us
There are many events that occur during the year that can affect
must be reported on Form 1099-NEC.
your tax situation. Preparation of your tax return involves sum-
• Attorneys’ fees, and marizing transactions and events that occurred during the prior
• Payments by a federal executive agency for services year. In most situations, treatment is firmly established at the
(vendors). time the transaction occurs. However, negative tax effects can
be avoided by proper planning. Please contact us in advance
if you have questions about the tax effects of a transaction or
event, including the following:
• Pension or IRA distributions. • Retirement.
• Significant change in income or • Notice from IRS or other
deductions. revenue department.
• Job change. • Divorce or separation.
This brochure contains general information for taxpayers and • Marriage. • Self-employment.
should not be relied upon as the only source of authority. • Attainment of age 59½ or 72. • Charitable contributions
Taxpayers should seek professional tax advice for more information. • Sale or purchase of a business. of property in excess of
• Sale or purchase of a residence $5,000.
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