When you pay U.S. tax-reportable recipients through Onerway and the cumulative amount in a tax year reaches the applicable filing threshold, you typically need to complete two obligations: file a 1099-NEC information return with the IRS and provide a corresponding copy to the recipient. Onerway Tax Filing helps streamline form collection, TIN validation, and filing preparation so your team spends less time on manual follow-up and reconciliation.
1099-NEC (Nonemployee Compensation) is the IRS form used to report non-employee service payments. Businesses use it when they pay freelancers, independent contractors, and other non-W-2 workers.
The IRS reintroduced 1099-NEC in 2020 to separate contractor compensation from 1099-MISC. That change simplified filing and aligned the filing deadline.
The One Big Beautiful Bill Act (OBBBA) signed in 2025 raised the federal 1099-NEC filing threshold from $600 to $2,000 for payments made on or after January 1, 2026. Starting in 2027, the threshold adjusts annually for inflation.
Even if a payment is below $2,000 and does not require federal filing, the payee still needs to report income on their own tax return. State-level thresholds may differ, so check your applicable state tax authority guidance and consult a qualified tax advisor.
The 1099-NEC deadline is January 31 of the following year for both paper and electronic filing, with no automatic extension. For tax year 2026, the deadline moves to February 1, 2027 because January 31 falls on a Sunday.
| Aspect | 1099-NEC | 1099-MISC |
|---|---|---|
| Purpose | Non-employee service compensation | Other income such as rent, royalties, prizes, or settlements |
| Who files | Paying merchant or business | Paying merchant or business |
| 2026 threshold | $2,000 | Most payments $2,000; royalties $10 |
| IRS deadline | January 31 | February 28 (paper) / March 31 (electronic) |
Use the Tax Filing docs in this order:
| Section | What it covers |
|---|---|
| Get Started | Environment, authentication, and webhook basics |
| Payee Tax Information Form Types | Required tax forms for different payee types |
| Payee Identifier | How merchantRefId identifies, tracks, and aggregates payee records |
| Tax Information Collection Flow | Collection flow, link behavior, and page states |
| API Introduction | Endpoints, request fields, and webhook notifications |
| Error Codes | Common tax module error codes |
| Enumerations | Enum values for taxType, formType, deliveryMode, and formStatus |