Form 1099-NEC is one of the most important tax forms for independent contractors, freelancers, and healthcare professionals working outside a traditional employment relationship. For CRNAs and locum tenens providers in particular, this form often represents the bulk of annual income reported to the IRS. 

Whether you receive a 1099-NEC or are responsible for issuing one, understanding how the form works helps prevent reporting errors, underreported income, and avoidable penalties. This guide explains what Form 1099-NEC is, why it matters, and how it applies in real-world contractor scenarios. 

What Is Form 1099 – NEC and Why It Matters

Form 1099-NEC is the IRS information return used to report non-employee compensation. This includes payments made by a business to an individual who performs services but is not classified as an employee.

The IRS brought back Form 1099-NEC in 2020 to fix a long-standing reporting issue. Prior to that, non-employee compensation was reported on Form 1099-MISC, which caused confusion because that form had different filing deadlines and was used for many unrelated payment types. Separating contractor pay into its own form improved clarity for both payers and recipients. 

For contractors, the form signals income that the IRS already knows about. For businesses, it represents a compliance obligation that must be handled correctly and on time. 

1099 – NEC vs 1099 – MISC

Form 1099-NEC is used only for payments made for services performed by non-employees. These payments typically represent earned income from professional or contract work. 

Form 1099-MISC is still used, but for other types of payments such as rent, royalties, prizes, awards, and certain legal settlements. It no longer reports contractor pay. 

This distinction matters because filing the wrong form, or filing it late, can trigger IRS penalties even when the income itself is reported correctly. 

Who Needs to Issue or Receive a 1099 – NEC?

Form 1099-NEC applies to both sides of a contractor relationship: the business making the payment and the individual receiving it.

Businesses must issue Form 1099-NEC when they pay $600 or more to a non-employee for services during the year. Independent contractors who meet this threshold should expect to receive the form and use it when preparing their tax return.

Conditions That Trigger 1099 – NEC filing

The IRS requires Form 1099-NEC when all of the following conditions are met: 

• The worker is not an employee 

• The payment was made for services, not products 

• The payment occurred in the course of a trade or business 

• Total payments to the worker reached $600 or more for the year 

Additionally, if a business withholds federal income tax under backup withholding rules, a 1099-NEC must be filed regardless of the dollar amount paid. 

This is especially relevant for staffing agencies, healthcare facilities, and medical groups that engage CRNAs and locum tenens providers as independent contractors. 

Key Deadlines for Form – NEC in 2026

Form 1099-NEC has one of the strictest deadlines in the 1099 series.

Businesses must: 

• Furnish the form to the contractor by January 31 

• File the form with the IRS by January 31 

Unlike some other information returns, Form 1099-NEC generally does not qualify for an automatic extension. Extensions are only granted in limited hardship situations, which means preparation must happen well before year-end. 

Unlike some other information returns, Form 1099-NEC generally does not qualify for an automatic extension. Extensions are only granted in limited hardship situations, which means preparation must happen well before year-end. 

Official IRS guidance on Form 1099-NEC and filing instructions is available directly from the Internal Revenue Service.

W-9 Accuracy and Recordkeeping Tips

Accurate 1099-NEC reporting depends heavily on the quality of the information collected before payments are made. Most filing problems begin with incomplete or incorrect W-9s. 

EIN vs SSN – What to Use on the W9

Independent contractors may provide either a Social Security Number (SSN) or an Employer Identification Number (EIN) on Form W-9. Both are acceptable as long as the name and number match IRS records.

For CRNAs operating through an LLC or professional entity, an EIN is commonly used. Individual freelancers may provide an SSN instead. Mismatches between names and identification numbers are a frequent cause of IRS notices.

Why You Should Collect W – 9s Early in the Year

Collecting W-9s before issuing the first payment avoids delays, incomplete records, and last-minute scrambling in January. Businesses that wait until year-end often discover missing information when deadlines are already tight.

What Counts as Non-Employee Compensation?

Non-employee compensation generally includes payments made for services performed by someone who is not on payroll. 

This commonly includes: 

• Freelance or contract labor 

• Consulting or advisory work 

• One-time professional services 

• Project-based engagements 

Payments for goods, personal reimbursements under accountable plans, or purely personal payments are generally excluded. 

Common Scenarios: Freelancers, CRNAs, Locum tenens, and Consultants

• CRNAs and locum tenens providers often receive 1099-NECs from staffing agencies or healthcare facilities for clinical services. 

• Freelancers and gig workers may receive multiple 1099-NECs from different clients throughout the year. 

• Consultants typically receive 1099-NECs for advisory or project-based work performed for businesses. 

Understanding whether income qualifies as non-employee compensation helps ensure it is reported correctly and taxed appropriately. 

What to Do If You Receive a 1099 – NEC

Receiving a 1099-NEC does not mean additional tax is automatically owed—but it does mean the income has been reported to the IRS. 

Reporting 1099 – NEC Income on Your Tax Return

Income reported on Form 1099-NEC must be included on your tax return, typically as business income. This income is generally subject to both income tax and self-employment tax. 

The amounts on the form should be reconciled against your own records to ensure accuracy. 

What If You Didn’t Get One But Should Have?

You are still required to report income even if a 1099-NEC was not issued. The form is an information return, not a determination of whether income is taxable.

Failing to report income because a form was not received can create problems later if the IRS identifies a mismatch.

Penalties for Failing to File or Issue a 1099 – NEC

The IRS may assess penalties for: 

• Failing to file 

• Filing late 

• Filing with incorrect or missing information 

Penalties can apply even when errors are unintentional, and they increase the longer the issue remains unresolved. This is why accurate preparation and timely filing are critical. 

Final Tips to Stay Compliant This Tax Season

Staying compliant with Form 1099-NEC requirements requires planning, consistency, and clear records. 

Key practices include: 

• Classifying workers correctly 

• Collecting W-9s early 

• Tracking payments throughout the year 

• Reviewing filing obligations before January 

Many businesses and contractors rely on ongoing tax advisory services to manage reporting obligations and reduce compliance risk.

Schedule a consultation if you need help preparing, issuing, or reporting Form 1099-NEC accurately.