What Is a 1099? Types of 1099 Forms and Who Receives Them
Last updated 04/09/2026 by
Ante Mazalin
Edited by
Andrew Latham
Summary:
A 1099 is a family of IRS information returns used to report income you received that wasn’t paid through an employer’s payroll — including freelance income, interest, dividends, retirement distributions, and proceeds from sold assets — so both you and the IRS know it exists for tax purposes.
The type of 1099 depends on the income source.
- 1099-NEC / 1099-MISC: Reports self-employment and freelance income ($600+ from a single payer) and other miscellaneous payments. The most common 1099 for gig workers and contractors.
- 1099-INT: Reports interest income of $10 or more from banks, credit unions, and other financial institutions.
- 1099-R: Reports distributions from retirement accounts — 401(k)s, IRAs, pensions, and annuities. Required for rollovers, withdrawals, and RMDs.
- 1099-B: Reports proceeds from selling stocks, bonds, and other securities — used to calculate capital gains and losses.
Unlike a W-2, a 1099 generally doesn’t come with taxes already withheld. That means the income is fully taxable — and it’s your responsibility to report it and pay taxes on it, even if you didn’t receive a 1099 for it.
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How 1099s Work
The payer (bank, client, broker, retirement custodian) sends one copy of the 1099 to you and another copy directly to the IRS, typically by January 31. The IRS matches what you report on your tax return against the 1099s it received — discrepancies trigger automatic notices.
You don’t attach 1099s to your return, but the income they report must appear on your return. For freelance and self-employment income, this typically goes on Schedule C. For interest, dividends, and capital gains, it goes on Schedule B or Schedule D.
Major 1099 Types at a Glance
| Form | What Income It Reports | Minimum Threshold |
|---|---|---|
| 1099-NEC | Freelance/contractor pay (nonemployee compensation) | $600 |
| 1099-MISC | Rent, prizes, royalties, attorney fees, other misc income | $600 (varies by box) |
| 1099-INT | Interest from bank accounts, CDs, bonds | $10 |
| 1099-DIV | Dividends and capital gains distributions from investments | $10 |
| 1099-B | Proceeds from selling stocks, bonds, mutual funds, crypto | Any amount |
| 1099-R | Retirement distributions (401k, IRA, pension, annuity) | $10 |
| 1099-Q | Distributions from 529 college savings plans and Coverdell ESAs | Any amount |
| 1099-G | Government payments — unemployment compensation, tax refunds | Any amount |
| 1099-K | Payment card and third-party network transactions (PayPal, Venmo, etc.) | $5,000 in 2024 (dropping to $600) |
| 1099-C | Cancelled debt — forgiven loan balances that may be taxable income | $600 |
1099-NEC vs. 1099-MISC: The Key Split
Prior to 2020, all freelance and contractor income was reported on the 1099-MISC. The IRS split these in 2020, creating the 1099-NEC specifically for nonemployee compensation — the most common type of 1099 for gig workers, freelancers, and independent contractors.
The 1099-MISC still exists for other types of miscellaneous income: rents ($600+), royalties ($10+), prizes and awards, medical and health care payments, and legal settlements. If you’re a landlord, you may receive a 1099-MISC for rent paid to you by a business tenant.
Pro Tip: You’re required to report all income on your tax return — even if you don’t receive a 1099 for it. The $600 threshold applies to the payer’s obligation to send you a form, not to your obligation to report the income. A client who pays you $450 in cash isn’t required to send a 1099-NEC, but you’re still legally required to report that $450 as income on Schedule C. The IRS knows this gap exists and is one reason self-employment audits are more common than W-2 employee audits.
1099 vs. W-2: Employee vs. Independent Contractor
The distinction between receiving a W-2 and a 1099 reflects your classification as an employee vs. an independent contractor.
- W-2 employees: Employer withholds federal income tax, Social Security (6.2%), and Medicare (1.45%). You pay only the employee’s half of FICA.
- 1099 contractors: No withholding. You owe the full self-employment tax (15.3% covers both employer and employee halves of FICA) plus income tax. Quarterly estimated payments are expected if you’ll owe more than $1,000 for the year.
The tax cost of contractor status is real — a $100,000 in 1099 income carries approximately $14,130 in self-employment tax before income tax, compared to $7,650 for the same income as a W-2 employee. The self-employed can deduct the employer-equivalent half of SE tax, partially offsetting this.
For a step-by-step approach, see How to File Self-Employment Taxes.
Key takeaways
- A 1099 reports non-wage income to you and the IRS. There are over a dozen variants — the type depends on the income source.
- Payers must send 1099s by January 31. The IRS receives a copy directly and matches it against your return.
- You must report all income on your return, even if you don’t receive a 1099 for it. The $600 threshold applies to the payer’s filing obligation, not yours.
- 1099-NEC covers freelance and contractor income. 1099-INT covers bank interest. 1099-R covers retirement distributions. 1099-B covers investment sales.
- Unlike W-2 employees, 1099 contractors are responsible for their own tax withholding — through quarterly estimated payments — and owe self-employment tax on net earnings.
Frequently Asked Questions
Do I have to report 1099 income if I didn’t receive the form?
Yes. Your obligation to report income exists regardless of whether you receive a 1099. If a payer fails to send one, or sends it to an old address, the income is still taxable. The IRS may also have the 1099 even if you don’t — discrepancies between their records and your return trigger automatic CP2000 notices.
What is the 1099-K and when do I get one?
The 1099-K reports payments received through third-party payment networks — PayPal, Venmo, Cash App, Stripe, eBay, Etsy, and similar platforms. For 2024, the threshold is $5,000; the IRS plans to lower it to $600 in subsequent years. The 1099-K includes all payments, including personal reimbursements — you may need to distinguish taxable business income from non-taxable transactions on your return.
Is 1099 income subject to self-employment tax?
Only if it’s earned income from a trade or business — primarily 1099-NEC income. Interest (1099-INT), dividends (1099-DIV), and investment proceeds (1099-B) are not subject to self-employment tax. Retirement distributions (1099-R) are subject to income tax but not SE tax. The self-employment tax rate is 15.3% (12.4% Social Security + 2.9% Medicare) on net self-employment earnings.
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