Form 1099-NEC: Generate and file contractor Non-employee Compensation forms

Non-employee compensation is reported in Box 1 of Form 1099-NEC. This form will be available to generate in Wave beginning on January 16, 2023

Form 1099-NEC requirements

Due dates

Additional information

How to generate and file Form 1099-NEC with Wave

What is Form 1096 for?

How can I ensure my 1099-NEC forms generate with correct amounts?

Resources

Form 1099-NEC requirements 

You must send Form 1099-NEC, Non-employee Compensation (NEC), to any contractors you have paid at least $600 to during 2022, as well as file the form(s) with the Internal Revenue Service (IRS).

If the following four conditions are met, you must generally report a payment as NEC:

• You made the payment to someone who is not your employee.
• You made the payment for services in the course of your trade or business (including government agencies and nonprofit organizations).
• You made the payment to an individual, partnership, estate, or, in some cases, a corporation.
• You made payments to the payee of at least $600 during the year.

Click here to jump to instructions on how to generate and file 1099-NEC forms with Wave

Important dates

Form 1099-NEC is due to your contractors and the IRS by January 31st of the following tax year. If this date falls on a weekend or holiday, the filing deadline moves to the following business day.

The amount of the penalty is based on when you file the correct information return, and are as follows, with the maximums for small businesses:

• $50 per 1099, if you file within 30 days of due date; maximum penalty of $206,000
• $110 per 1099, if you file more than 30 days after the due date but by August 1; maximum penalty of $588,500
• $290 per 1099, if you file after August 1 or you do not file required information returns; maximum penalty of $1,177,500

Not providing a correct statement (intentional disregard) carries a penalty of $580 per 1099, with no maximum for the year.

Additional information

• Form 1099-NEC can be filed electronically through the IRS' FIRE (Filing Information Returns Electronically).
• Forms 1099-NEC filed with Wave will be e-filed with the IRS. If you choose to file on paper, review IRS requirements and instructions. You will be required to e-file if the number of information returns you have to submit exceeds 250.
• If filing on paper, a Form 1096 (cover page) must be sent as well.
• Form 1099-K is still used for payment cards and third party network transactions - this is provided by the third party network directly to the contractor.
• Issuers have the option to truncate the recipients SSN/EIN. This can look either like:
  • XXX-XX-1234 or;
  • replacing X with *

How to generate and file Form 1099-NEC with Wave

Your 2022 1099-NEC forms will be available to generate in Wave in January 2023.

With Wave you can generate and file a 1099-NEC form for every contractor marked as a 1099 Contractor and paid more than $600 in the 2022 calendar year. When you generate and file with Wave, remember to provide your contractor with Copy B of the form. Copy B is available to download after generating a 1099-NEC Form.

1. Click Payroll > Click Tax Forms
2. Choose the year 2022 from the drop down menu
3. Click Generate next to the 1099 you would like to file
4. Review and confirm the details of yourself, as the Payer and of your 1099 contractor, as the Recipient, including their total compensation for the tax year
5. Click Generate 1099-NEC
6. On the following page, proceed to Step 3 and click File this 1099-NEC now. When selected, Wave will handle federal and applicable state filing for this 1099-NEC on your behalf.

   Please note that you must have an active subscription with Wave Payroll in order to file with Wave. The cost for filing with Wave is $5 per form.

7. Repeat these steps for remaining 1099 contractors.
8. After 1099-NEC forms are generated, download Copy B and give it to your contractor. Copy C is available for your records.