This article covers the difference between three different IRS forms: Form 1099-K, Form 1099-MISC, Form 1099-NEC, and how each relates to Wave
What is Form 1099-K?
A 1099-K is an informational form that summarizes the online payment activity in your Wave Payments account. If your business uses Wave Payments and you’ve processed more than $20,000 AND also processed over 200 transactions in the calendar year, Wave will provide a copy of your 1099-K to you, and a copy to the IRS.
What is Form 1099-NEC?
Form 1099-NEC is an IRS form that summarizes all non employee compensation your business has paid to a contractor. Beginning in the 2020 tax year, it replaces Form 1099-MISC for reporting non-employee compensation. Independent contractors use these forms to file their taxes.
You must provide Form 1099-NEC to any contractor you paid more than $600 in the calendar year. If you use Wave Payroll, Wave will generate a 1099-NEC form for every contractor who qualifies. Wave can also file these forms for you electronically.
What is Form 1099-MISC?
Form 1099-MISC, Miscellaneous Income is an IRS form that summarizes miscellaneous payments outlined by the IRS your business has paid during the year. Prior to the 2020 tax year, it was also used to report non-employee compensation. Employers who used Wave for the 2019 tax year or earlier and generated 1099-MISC tax forms will still find these in their account.
Wave does not support producing 1099-MISC forms for the 2020 tax year on.