After the deadline, but within 30 days
$60 per form
After 31 days - August 1st
$120 per form
After August 1st, or not at all
$310 per form
Intentionally not filing
$630 per form
1099 Forms › Form 1099-NEC Instructions for 2025
IRS Form 1099-NEC Instructions: Line-by-Line Explained
Form 1099-NEC is an information return that reports non-employee compensation to the IRS. Non-employee compensation includes:
- Payments made to individuals not considered employees
- Cash payments for fish purchased from someone in the trade or business of catching fish
- Payments made to an attorney
How to Fill Out the 2025 Form 1099-NEC
Form 1099-NEC consists of 12 boxes (fields), including two checkboxes. Each box requires specific information related to the reporting. The following is a breakdown of each box on the IRS Form 1099-NEC and an explanation of how to complete each.
Sections For Entering Payer Information
Complete the Payer Details section. This includes:
- Name
- Address
- Contact phone number
- Tax Identification Number (TIN)
Sections For Entering Recipient Information
Complete the Recipient Details section. This includes:
- TIN
- Name
- Street Address
- City, State, Zip
Completing Boxes 1 to 7 on Form 1099-NEC
In Boxes 1 to 7, the payer reports applicable payments and tax withheld from the recipient:
Box 1 – Non-Employee Compensation
Enter the non-employee compensation if payment is $600 or more for a calendar year.
Box 2 – Payer Made Direct Sales Totaling $5,000 or More
Mark an "X" in the checkbox if you have made sales of consumer products totaling $5,000 or more to a person for resale purposes, using a buy-sell, deposit-commission, or another commission basis. These sales are intended for resale by the buyer or another person anywhere other than in a permanent retail establishment. Do not enter a monetary value in this box. This was previously reported on Form 1099-MISC. Filers can report it in Form 1099-NEC Box 2 or Form 1099-MISC Box 7.
Box 3 – Reserved for Future Use
The IRS has left Box 3 blank for any additional information in the future.
Box 4 – Federal Income Tax Withheld
Enter the amount of tax withheld from the payments made to your recipient. This withheld amount is commonly known as backup withholding. The IRS mandates payers to withhold a specific percentage of payment from the recipient when they do not provide the correct TIN information to the payer.
Box 5 – State Tax Withheld
Input the state tax withholding if applicable in your state. Each recipient can have two state payments.
Box 6 – State/Payer's State No
Enter your employer's state identification number and the abbreviated name of your state— for instance, TX– Texas, CA – California.
Box 7 – State Income
Enter the amount of the state payment for the corresponding state listed in Box 6.
Discover more about 1099-NEC State Filing Requirements.
What is the deadline for filing Form 1099-NEC with the IRS?
-
January 31st, 2025
Recipient Copies/Paper/E-file
Form 1099s must be distributed by the employer to the recipient on or before January 31st
Note: If the filing deadline lands on a Saturday, Sunday, or legal holiday, the due date will automatically be extended to the following business day.
Visit our deadlines article to learn more about Form 1099 due dates.
Most states also have a filing deadline of January 31st, but some may vary. View our state deadlines post to learn more about the state filing deadlines.
What are the different Form 1099 Copies?
Each Form 1099 has five different copies with their specific purpose:
Copy A
IRS copy for paper filing.
Copy 1
Filed with the State Tax Department.
Copy B
Recipient copy.
Copy 2
Recipient state copy used for state income tax reporting.
Copy C
Payer's copy for their records.
Get started with BoomTax, and file your 1099 tax forms with federal/state and mail recipient copies from one place. BoomTax will never remove past years' filings, and you can continue to make corrections at any time, no matter the year. File my 1099 directly to the IRS Now!
E-filing vs. Paper Filing
- Immediate real-time IRS updates
- File 1000s of forms easily at once
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- Can help with questions in real-time in chat
Paper Filing
- It can take weeks to hear a status update
- Requires unique red ink form
- Prone to human error
- No expert to help with questions
Note: IRS recommends that payers utilize the e-file option over paper filing for faster processing.
Are you concerned about managing various copies of Form 1099-NEC? Switch to an e-filing solution and file your 1099-NEC with the IRS and state agencies in a few simple steps. You can also send recipient copies via postal mail and online access.
How to File Form 1099-NEC Electronically
To file your Form 1099-NEC electronically with the IRS and the necessary state agencies, use an IRS-authorized e-file provider that supports e-filing for all 1099, W2, Pay Data, and ACA Forms.
Import Your Form 1099-NEC Data
You can import your data as Excel, XML, or use files from popular payroll providers like QuickBooks, UKG, ADP, and many more.
Step-By-Step Wizard
We walk you through the process with no complicated jargon. You can also live chat with a real person as you work on your filing for hands-on help.
E-File & Mail Employee Copies
Once your data is loaded, you can e-file and distribute employee copies in minutes.
What is the Penalty for Missing Form 1099 Deadline?
Failing to file Form 1099 by the deadline or meeting the deadline but providing incorrect recipient information can result in IRS penalties ranging from $60 to $630, depending on how late the form is submitted. The IRS has increased the penalty amounts for the 2025 filing year.
1099 penalties may be subject to the following:
- Furnishing incorrect information on a return
- Failure to provide the required information
- Late filing of returns
- Paper filing when required to file electronically (E-file 1099 if you have 10 or more information returns)
The IRS is accustomed to changing rules year-to-year, sometimes even in the middle of the current tax season! This is why having the most accurate information about the IRS requirements and deadlines for filing any Form 1099 is essential. Use reliable tax software to e-file your forms and stay updated on any changes in regulations or deadlines.
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BoomTax and its affiliates do not provide tax, legal, or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisors prior to engaging in any transaction.
