What is a 1099?
Forms 1099-MISC and 1099-NEC are IRS tax forms used to report income other than wages, salaries, tips, and other employee compensation. Depending on the type of payment issued to you, you may receive one or the other, or on some occasions - both! Please see below for differences between the two forms. For more information you can view the IRS Instructions for Forms 1099-MISC and 1099-NEC here.
The 1099-NEC will be used to report non-employee compensation issued for $600 or more during a single calendar year. This includes fees, commissions, or other forms of compensation for services performed by you, for a company, the Payer.
Box 1: Non-employee compensation of at least $600.
Box 2: Checkbox indicating payer made direct sales totaling $5,000 or more of consumer products to recipient for resale
Box 4: Federal income tax withheld. Justworks does not withhold federal income tax on contractor or vendor payments, so this will be blank.
Box 5-7: State tax specific information.
As the name implies, the 1099-MISC form will be used to report certain miscellaneous forms of payment outlined below. This includes payments of at least $10 in royalties, $600 in rents, medical and health care payments, and certain other miscellaneous forms of payment. Please see general box descriptions below for reference.
Box 1: Rents paid for $600 or more.
Box 2: Royalties paid for $10 or more.
Box 3: Other types of payments that are not considered wages, like prizes or awards.
Box 4: Federal income tax withheld. Justworks does not withhold federal income tax on contractor payments, so this will be blank.
Box 5: This box reports fishing boat proceeds.
Box 6: This box is for payments providing healthcare services made in the course of trade or business over $600.
Box 7: Checkbox to indicate proceeds from the sales of consumer goods for $5,000 or more.
Box 8: This box will be populated by substitute payments in lieu of dividends or interest.
Box 9: This box will be populated if you’re a farmer that received crop insurance proceeds of $600 or more paid by an insurance company.
Box 10: This box will be populated by gross proceeds totaling $600 or more paid to an attorney.
Box 11: This box will be populated by the amount paid for the purchase of fish for resale.
Box 12: This box will show Section 409A deferrals.
Box 13: This box will indicate if there is a FATCA filing requirement.
Box 14: This box will indicate total compensation of excess golden parachute payments subject to a 20% excise tax.
Box 15: This box will include any non-qualified deferred compensation.
Box 16 - 18: These boxes will show state tax specific information.
What Do I Do With My 1099?
You will receive your 1099 by mail and directly in your Justworks account. The electronic and paper copies will be identical and either can be used to file your taxes.
Why Did I Receive Two 1099s?
If you received nonemployee compensation in addition to any of the compensation types mentioned in the 1099-MISC description above, you will receive two Forms and should use both when filing.
How Do I Find My 1099 in Justworks?
Log in to Justworks and click on “Documents” in the left-side menu bar to find a PDF copy of your 1099.
I Lost My 1099. Can I Get Another Copy?
We only issue one 1099-NEC and/or 1099-MISC, if applicable, for each individual. But don’t worry! You can print off a PDF copy of your 1099/s from your Justworks account.
My Company is an S-Corp or a C-Corp. Why Did I Receive a 1099?
Per the IRS, 1099s can be issued to S-corps and C-corps and may be required for certain types of payments such as attorneys' fees or medical and health care payments.
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, legal or tax advice. If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal or tax advisor.