If your NJ business pays any non-corporate individual or entity $600 or more for services during the year, you are required to issue a 1099-NEC form by January 31. Failure to file carries penalties ranging from $60 to $310 per form depending on lateness, and intentional disregard penalties of $630 or more per form with no cap. The IRS has increased enforcement of 1099 compliance in recent years. Greg Monaco, CPA builds 1099 tracking into the annual bookkeeping process so January filing is straightforward.

Failure to issue required 1099-NEC forms can result in penalties, and the IRS has been increasing enforcement.

When Should I Issue a 1099-NEC to a Contractor?

Any non-corporate person to whom you paid $600+ for services. Exceptions: payments to C-Corps/S-Corps (except attorneys), payments via credit card/processor (reported on 1099-K).

What Is the 1099-NEC Filing Deadline?

January 31: Furnish to recipients AND file with the IRS. No automatic extension.

How Does NJ State 1099 Filing Work?

NJ participates in the Combined Federal/State Filing Program. E-filing with the IRS automatically forwards to NJ.

What Are the Penalties for Not Filing 1099-NEC Forms?

Range from $60 to $310 per form depending on lateness. Intentional disregard: $630+ per form with no cap.

What Are the Most Common 1099-NEC Mistakes NJ Businesses Make?

Not collecting W-9s before payment, issuing to corporations unnecessarily, and misclassifying employees as contractors. Booth renters at tattoo shops and barber shops are a common example where 1099s need to be issued correctly.

Key Takeaway

The January 31 deadline for both furnishing 1099-NEC forms to recipients and filing with the IRS allows no room for error. The best approach is to collect W-9 forms from every contractor before making the first payment and track payments throughout the year. NJ participates in the Combined Federal/State Filing Program, so e-filing with the IRS automatically forwards copies to NJ.

OBBBA update (2026): Under OBBBA Section 70433, the 1099-NEC reporting threshold rises from $600 to $2,000 starting in 2026. Businesses no longer need to issue a 1099-NEC for contractor payments between $600 and $1,999, though the income remains taxable to the recipient. The 1099-K threshold has been reverted to $20,000 and 200 transactions, reversing the planned reduction to $600.

Related reading: NJ Payroll Basics | Starting a Business in NJ | Tax preparation services

## Frequently Asked Questions

When are 1099-NEC forms due in NJ?

Form 1099-NEC is due to both the recipient and the IRS by January 31 of the year following the tax year. There is no automatic filing extension for 1099-NEC. NJ also requires filing Form NJ-W-3 along with copies of 1099 forms with the NJ Division of Taxation by February 15. Missing these deadlines triggers penalties starting at $60 per form.

Do I need to issue a 1099 to an LLC?

It depends on the LLC's tax classification. Single-member LLCs and multi-member LLCs taxed as partnerships should receive a 1099-NEC if you paid them $600 or more for services. LLCs taxed as S-Corps or C-Corps generally do not need a 1099, with exceptions for attorney payments and certain other categories. When in doubt, request a W-9 from the payee to determine their status.

What are the penalties for not filing 1099 forms?

Federal penalties range from $60 per form (filed within 30 days of the deadline) to $310 per form (filed after August 1 or not filed at all). Intentional disregard penalties are $630 or more per form with no cap. NJ imposes additional penalties for failing to file state copies. The IRS has increased enforcement of 1099 compliance in recent years.

What is the difference between 1099-NEC and 1099-MISC?

Form 1099-NEC reports nonemployee compensation, meaning payments of $600 or more to independent contractors for services. Form 1099-MISC reports other types of payments such as rent ($600+), royalties ($10+), prizes and awards, and other miscellaneous income. The forms have different due dates: 1099-NEC is due January 31, while 1099-MISC is due February 28 (March 31 if filed electronically).