Business taxpayers are required to file Form 1099-NEC by the due date to avoid late filing penalties.

Form 1099 NEC Deadlines / Due Dates 

Action	Deadline
Furnish Copy B to Recipient	January 31 of the following year
File Copy A with the IRS (Paper Filing)	January 31 of the following year
File Copy A with the IRS (Electronic Filing)	March 31 of the following year if filing electronically

Who must file 1099-NEC? 

Businesses and individuals are now required to complete a 1099-NEC form, also known as Non-employee Compensation, for reporting payments of $600 or more made to non-employee individuals or businesses. This new form has replaced the information that was previously reported on Form 1099-MISC in Box 7. 

Form 1099 NEC – Eligibilities and Liabilities 

You must complete and send a 1099-NEC form to any independent contractors or businesses to whom you paid $600 or more in fees, commissions, prizes, awards, or any other compensation for services provided to your business. 

• Businesses: If you are a business owner and have made such payments to non-employees, you must file Form 1099-NEC to report these payments to both the IRS and the recipient. 
• Individuals: If you are a self-employed individual or a freelancer who has made payments of $600 or more to non-employee service providers, you are also obligated to file Form 1099-NEC. 

Exceptions: Who isn’t required to issue a 1099-NEC? 

You do not have to issue a 1099-NEC in the following cases: 

• If your payment was for physical products or goods rather than services. 
• If the business you paid is classified as a C corporation or S Corporation, except when the payment was for medical or health care services or attorney services. The IRS provides specific circumstances for when a 1099-NEC should or should not be issued to a corporation. 
• If the business is an LLC but operates as a sole proprietorship. If you are uncertain about a business’s classification, you can refer to the Form W-9 you should have received from the vendor when you began working with them. 

What are the penalties for a business failing to meet a 1099-NEC deadline? 

Businesses are typically obligated to report payments and compensation provided to non-employees and specific vendors through the use of 1099 forms. If you receive income from sources other than regular wages or salaries, you may expect to receive a Form 1099-MISC or Form 1099-NEC. Generally, the income documented on these forms is subject to federal and state income taxes for the recipient.  

If a business fails to furnish a Form 1099-NEC or 1099-MISC by the specified deadline, the penalty amount in 2022 can range from $50 to $280 per form, depending on how long after the deadline the business provides the form. Small businesses have a yearly maximum penalty limit.

However, if a business deliberately disregards the obligation to furnish an accurate payee statement, it becomes subject to a minimum penalty of $570 per form in 2022 or 10% of the income reported on the form, without an upper limit.