About the 1099-NEC

All businesses must file a form 1099-NEC form for nonemployee compensation if all four of these conditions are met:

• It is made to someone who is not your employee.

• It is made for services in the course of your trade or business.

• It was made to an individual, partnership, estate, or corporation.

• The payments made to the payee met or exceeded the payment threshold for the year.

Some examples of payments you must report on Form 1099-NEC include: 

• Professional service fees to attorneys — including law firms established as corporations — accountants, architects, etc.

• Fees paid by one professional to another — for example, fee-splitting.

• Payments for services including payment for parts or materials used to perform the services if they were incidental to the service.

• Commissions paid to nonemployee salespeople not repaid during the year. 

Payments to Attorneys 

Use Form 1099-MISC to report gross proceeds exceeding the threshold, including payments to corporations. Gross proceeds aren’t fees for an attorney’s legal services; they are amounts paid in other ways, like in a lawsuit settlement agreement, for example.

Use Form 1099-NEC to report payment of attorney fees for services. 

Return to IRS Form 1099 Overview