What is Nonemployee compensation?
1.1k views | Last modified 12/29/2020 7:10:45 AM EST | Added by ExpressEfile Team

Applicable To
Form 941 Form 1099 / W-2 Form 2290

Nonemployee compensation needs to be reported by filing Form 1099-NEC. Previously, nonemployee compensation has been reported in Box 7 of Form 1099-MISC. As per the IRS, a payment is considered nonemployee compensation if one of the following conditions met:

The payer has made payment

  • to someone who is not their employee or an individual, partnership, estate, or corporation
  • for services in the course of business or trade
  • totaling $600 in the calendar year

The nonemployee compensation may include the following payments:

  • Fees
  • Benefits
  • Commissions (including payments made to nonemployee salespeople)
  • Prizes and awards for the services rendered by a nonemployee
  • Fish purchases for cash
  • Professional service fees paid to attorneys
  • Any other form of compensation for services performed for your trade or business by a nonemployee.

You can e-file Form 1099-NEC through ExpressEfile easily and securely.

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