Form 1099-MISC: Miscellaneous Income Definition

Form 1099-MISC: Miscellaneous Income is an Internal Revenue Service (IRS) form taxpayers use to report non-employee compensation. This is generally a business payment—not a personal payment. Independent contractors, freelancers, sole-proprietors, and self-employed individuals receive one from each client who paid them $600 or more in a calendar year.

This form is one of many in the 1099 series. Taxpayers receive 1099s, including the Form 1099-MISC, at the end of the tax year when they receive any type of non-employee compensation, such as distributions from profit-sharing or dividends from their broker. 

Form 1099-MISC: Miscellaneous Income is completed and sent out by someone who has paid at least $10 in royalties or broker payments instead of dividends or tax-exempt interest to another individual. The form is also sent to anyone who received at least $600 in:

• Rents
• Services performed by someone other than an employee
• Prizes and awards
• Other income payments
• Medical and healthcare payments
• Crop insurance proceeds
• Cash payments for fish (or other aquatic life) purchased from anyone who makes a living catching fish
• Cash paid from a notional principal contract to an individual, partnership, or estate
• Payments to an attorney
• Any fishing boat proceeds

This form can also be used to report earnings from direct sales of at least $5,000 of consumer products to a buyer for resale anywhere other than a permanent retail establishment.

The payer must send the form to the recipient by January 31. The recipient can attach the form to their tax return.

Copy A of Form 1099-MISC appears on the IRS website in red. This copy of the form is not intended for print, rather it is for IRS use only.

The black parts of the form can be completed and printed:

• Copy 1 goes to the recipient’s state tax department
• Copy B is retained by the recipient
• Copy 2 goes with recipient's state tax return
• Copy C stays with the payer 

The payer includes their name, address, and identification number, as well as the recipient's name, address, and Social Security number.

The form also has a series of boxes in which the payer will input whichever type of payment was made. That may include Rents in Box 1, Royalties in Box 2, or Non-Employee Compensation in Box 7. Other boxes that may be filled out include Box 4: Federal Income Tax Withheld and Box 16: State Tax Withheld.

Here is a list of the specific 1099 forms and the purpose of each:

• 1099-A: Acquisition or Abandonment of Secured Property
• 1099-B: Proceeds From Broker and Barter Exchange Transactions
• 1099-C: Cancellation of Debt
• 1099-CAP: Changes in Corporate Control and Capital Structure
• 1099-DIV: Dividends and Distributions
• 1099-G: Certain Government Payments
• 1099-H: Health Coverage Tax Credit (HCTC) Advance Payments
• 1099-INT: Interest Income
• 1099-K: Payment Card and Third Party Network Transactions
• 1099-LS: Reportable Life Insurance Sale
• 1099-LTC: Long-Term Care and Accelerated Death Benefits
• 1099-OID: Original Issue Discount
• 1099-PATR: Taxable Distributions Received From Cooperatives
• 1099-Q: Payments From Qualified Education Programs
• 1099-QA: Distributions from ABLE Accounts
• 1099-R: Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. 
• 1099-S: Proceeds from Real Estate Transactions
• 1099-SA: Distributions From an HSA, Archer MSA, or Medicare Advantage MSA
• 1099-SB: Seller's Investment in Life Insurance Contract