To fill out a 1099-NEC for 2026, enter your details and the contractor’s on the left, put the year’s total pay in box 1a, and leave every other box empty unless tips, overtime, withholding or state tax apply.
The form changed this year. Use the December 2026 revision, because older copies have no boxes 1b, 1c or 1d.
The reporting floor moved too. A contractor now needs $2,000 or more in reportable pay before you owe a form, not the old $600 many guides still quote. Everything below follows one invented company through a full filing.
Before you start: who actually gets one
A 1099-NEC is for payments made in the course of your business to someone who is not your employee. The hard part is usually sorting payees, not typing numbers. Here is everyone a small Charleston event company paid last year:
| Payee | Paid | Form | Why |
|---|---|---|---|
| Mara Ellison Freelance bartender | $7,680 | 1099-NEC | Services by a nonemployee, over the floor. A further card payment stays off the form. |
| Deshawn Cole Video editor | $4,320 | 1099-NEC | Services, and tax was withheld, which requires a form at any amount. |
| Lila Romero Photographer | $1,850 | None | Under the $2,000 floor. Lila still reports the income. |
| Greene Street Catering Inc. Caterer | $11,400 | None | Its W-9 says C corporation, and most payments to corporations are exempt. |
| Tomas Reyes Tent rental | $3,100 | 1099-MISC | Rent goes in box 1 of the other form, over its $2,000 floor. |
Get a Form W-9 from each contractor before you pay them. It gives you the legal name, the taxpayer identification number (TIN) and the tax classification, and that last line is how you know the caterer above needs no form. Our comparison of 1099-NEC vs 1099-MISC sorts other payment types.
One form, filled in from top to bottom
This is the bartender’s finished form, field by field. Most of it comes straight from the W-9 and your payment records:
| Field | What goes there | This form |
|---|---|---|
| CORRECTED and VOID | Leave both empty on a first filing | Empty |
| Payer's name and address | Your legal business name. Street, city, state and ZIP now have separate boxes | Harbor & Vine Events LLC 410 King Street, Charleston, SC 29403 |
| Telephone number | A number the recipient can call with questions | (843) 555-0142 |
| Payer's TIN | Your EIN, or SSN if you have no EIN. Never shortened | 12-3456789 |
| Recipient's TIN | From their W-9, with hyphens. The recipient's copy may show only the last four digits | XXX-XX-4417 |
| Recipient's name and address | Exactly as on the W-9 | Mara Ellison 27 Rutledge Avenue, Charleston, SC 29401 |
| For calendar year | The year you paid them | 2026 |
| Account number | Required only if you file more than one form for this recipient | Empty |
| 2nd TIN not. | Only after two IRS notices of a wrong TIN within three calendar years | Empty |
| 1a Nonemployee compensation | Everything reportable for the year, tips included | $7,680.00 |
| 1b Cash tips | Tips inside box 1a, whether paid in cash or charged | $1,480.00 |
| 1c TTOC | Up to two Treasury Tipped Occupation Codes | 101 |
| 1d Overtime compensation | Only the premium part of qualified overtime | Empty |
| 2 Direct sales | An X for $5,000 or more of consumer products sold for resale | Empty |
| 3 Excess golden parachute payments | Rare. The amount over the base amount | Empty |
| 4 Federal income tax withheld | Backup withholding you took out | Empty |
| 5 to 7 State | Optional for the IRS. State tax withheld, state and payer number, state income | Empty |
Two details trip people up. Your own TIN always prints in full, on every copy. The contractor’s may be cut to the last four digits on their copy, but never on what you file with the IRS.
Box 1a: what counts in the total
Box 1a holds fees, commissions and anything else you paid for the person’s work. Add parts or materials when they came along with the service, such as a repair bill that lists labor and parts separately. Travel you repaid without receipts counts as well.
Three things stay out. Rent belongs on Form 1099-MISC. Payments for goods alone, such as merchandise or freight, need no form. Credit card and payment network transactions are reported by the processor on Form 1099-K, so the card payment below never reaches this form:
Sales tax depends on who owes it. If the tax is imposed on the contractor and you pay it to them, include it. If it is imposed on you and they just collect it, leave it out.
Boxes 1b, 1c and 1d are new for 2026
These boxes exist because of the 2025 tax law that created deductions for qualified tips and overtime. They split out a part of box 1a so the contractor can claim those deductions. They never add to the total.
Box 1b is tips, whether customers paid them in cash or charged them. Our bartender’s clients add tips to the invoice and the company passes them on, so that amount appears in box 1a and again here.
Box 1c takes up to two three-digit Treasury Tipped Occupation Codes from the IRS list. Bartenders are 101. If any of the tips came from work outside the list, one of the codes must be 000.
Box 1d is the premium part of overtime the Fair Labor Standards Act requires: the “half” in time and a half, not the whole pay. Those rules protect employees, so this box stays empty for most true contractors. Our overtime guide shows how the premium is worked out.
Box 4, when a contractor never returns a W-9
Most forms leave box 4 empty. It holds backup withholding, the 24% you must take out of payments when a contractor has not given you a TIN. You keep withholding until the number arrives, and you still file, leaving the recipient’s TIN box blank.
| Item | Amount | Where it lands |
|---|---|---|
| Editing fees | $4,000.00 | Box 1a |
| Travel repaid without receipts | $320.00 | Box 1a, because the editor did not account for it |
| Backup withholding at 24% | $1,036.80 | Box 4, and on your Form 945 |
| Box 1a total | $4,320.00 | Recipient's TIN box left blank |
| The editor actually received | $3,283.20 | Not shown on the form |
Withholding also removes the floor: once you withhold, a form is required whatever the amount. Pay the withheld tax to the IRS and report it on Form 945. A W-9 collected before the first payment avoids all of this.
Boxes 2, 3 and 5 to 7 are usually blank
Box 2 takes an X, never a dollar figure, when you sold $5,000 or more of consumer products to someone for resale outside a permanent store. Box 3 is for excess golden parachute payments, which few small businesses ever make.
The state boxes are there for your convenience and the IRS does not need them. Fill them in if you withheld state tax, or if your state asks for a copy. Copy 1 goes to the state tax department, and the rules differ, so check yours.
Sending it: copies, IRIS or paper
The December 2026 form has four copies: A for the IRS, 1 for the state, B and 2 for the contractor. Keep a copy for your own files too. Both the contractor’s copy and the IRS copy are due February 1, 2027. The full year’s calendar is in our W-2 and 1099 deadlines guide.
For the IRS copy you have two routes. The free IRIS portal takes it online, and it is required once you have 10 or more information returns of any kind. On paper, you need the official scannable form with Form 1096, because a Copy A printed from the IRS website cannot be filed.
The contractor’s copies need no special paper. Our free 1099-NEC generator makes Copies B and 2 on the current layout, with the new boxes and the TIN cut to its last four digits.
Sources: the IRS Instructions for Forms 1099-MISC and 1099-NEC (12/2026), the December 2026 form, the general instructions for information returns and the IRS page on backup withholding. The company and its payees are invented. Checked November 4, 2026.
