Who gets a 1099: Northwind's vendor list
Northwind's year-end vendor list, decided one vendor at a time: classification, what was paid for, how much and how.
Here is the list as it might stand on December 31, 2026. The drills, the insurance and the rent are in the September book; the others are illustrative. Payments made by card or through a payment network are left out of the total, because the processor reports them on Form 1099-K.
Where this lesson's rules come from
The sources behind this lesson's requirements, by kind. Anything marked as a convention is ours, not the rule-maker's.
- Federal statute
- IRC §862(a)(3) (opens in a new tab)Services performed outside the US are income from sources without the United StatesFree to read
- IRS guidance
- Instructions for Forms 1099-MISC and 1099-NEC (Rev. December 2026), Payments to corporations (opens in a new tab)Corporations are generally exempt; law firms are notFree to read
- Instructions for Forms 1099-MISC and 1099-NEC (Rev. December 2026), Form 1099-MISC, box 1 (opens in a new tab)Rent goes on Form 1099-MISCFree to read
- Instructions for Forms 1099-MISC and 1099-NEC (Rev. December 2026), Payments not reported (opens in a new tab)Goods are not reported on a 1099Free to read
- Instructions for Forms 1099-MISC and 1099-NEC (Rev. December 2026), Form 1099-K (opens in a new tab)Card and payment-network payments are reported on Form 1099-K, not the NEC or MISCFree to read
The words this page teaches
Each links to its glossary definition, which also names the authority behind it and the components that render it.
- Form 1099-NECThe IRS information return for nonemployee compensation paid to a contractor in the course of business — required at $600 a year for payments through 2025 and $2,000 from 2026 (indexed from 2027), due to the recipient and the IRS by January 31
- Form 1099-MISCThe IRS information return for rents, prizes and other listed payments made in the course of a business — $2,000 or more for payments made in 2026, $600 through 2025. Services go on Form 1099-NEC instead
- Form 1099-KThe information return from a payment settlement entity reporting a payee's gross payment card and third-party network receipts — card transactions at any amount; third-party network transactions only above $20,000 and 200 transactions, the threshold the OBBBA retroactively reinstated. Gross of refunds, chargebacks and fees, so it never ties to revenue
- Form W-8BENThe certificate a foreign individual gives a US payer, in place of a Form W-9, to establish foreign status. Entities use Form W-8BEN-E. Generally in effect until the last day of the third calendar year after the year it is signed
- PayeeThe party receiving a paymentConvention
See also
- Form 1099-NEC for startups: threshold, deadline, e-filingWho gets a 1099-NEC, the new $2,000 threshold, why a W-9 comes first, what goes on a 1099-K instead, and the deadlines, penalties and state copies.
- Contractor or employee? Classification for startupsContractor or employee depends on control, not the contract. The IRS test, state rules, 1099s, payroll registration and the cost of getting it wrong.
- Form 1099-NECThe IRS form that reports what you paid a US contractor for services. For payments made in 2026, you file one for each contractor paid $2,000 or more in the year (the IRS can adjust that for inflation from 2027); for 2025 payments the threshold was $600. Payments to corporations (other than for legal services), and payments made by card or through a payment processor, generally don't need one.
- Form 1099-KThe information return a card processor, payment app or online marketplace files to report the gross payments it settled to you in a year. Card payments are reported at any amount; payment apps and marketplaces report only above $20,000 and 200 transactions.
- Worker classificationThe call on whether a worker is an employee or an independent contractor. The IRS asks whether the company has the right to control how the work is done, not what the contract says, and several states apply stricter tests.