**Key takeaways:**

- The 1099-NEC is used to report non-employee compensation paid to independent contractors.
- Employers in the United States are required to issue a 1099-NEC to any independent contractor who was paid $600 or more during the year.
- If you’re hiring contractors outside of the United States, you don’t need to issue them a 1099-NEC. But there are other relevant documents you’ll need.

## What is a 1099-NEC, and do I need to issue one to my contractors?

The 1099-NEC is used to report non-employee compensation paid to independent contractors.

**In the United States, employers are required to issue a 1099-NEC to any independent contractor who was paid $600 or more during the year.** However, there are exceptions to this rule.

For example, if an independent contractor is incorporated as a corporation or limited liability company (LLC), they may not need to receive a 1099-NEC. Additionally, if an independent contractor is paid for services that are not subject to federal income tax, such as personal or household services, a 1099-NEC may not be necessary.

When hiring independent contractors abroad, it's important to research the requirements for issuing 1099-NEC forms in the country in which the independent contractor is based. These requirements may vary, and in some cases, a 1099-NEC may not be necessary.

In conclusion, the 1099-NEC is an important tax form for employers hiring independent contractors abroad. However, it's important to understand when a 1099-NEC is required and when it may not be necessary. By researching the requirements of the country in which the independent contractor is based, and consulting with a legal or tax professional if necessary, you can ensure that you're in compliance with local tax laws and regulations.

## When should I use a 1099-MISC instead?

Typically, the 1099-MISC form is used to report miscellaneous income, like rent payments, prize winnings, and other types of payments outlined [in this IRS article.](https://www.irs.gov/forms-pubs/about-form-1099-misc) But it’s no longer used to report standard non-employee compensation. That’s what the 1099-NEC is for.

## What if I’m hiring contractors abroad?

If you’re hiring contractors outside of the United States, the rules are a bit different: Your contractors don’t need a 1099-MISC, because they’re not paying taxes within the United States. However, you’ll have to ask your contractor to fill out a Form W-8 BEN instead. By filling out this form, your contractor is letting the United States know that they’re not a U.S. taxpayer, and thus don’t require a 1099.

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