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Paying Independent Contractors

If you pay independent contractors , you may have to file Form 1099-MISC, Miscellaneous Income, to report payments for services performed for your trade or business. If the following four conditions are met, you must generally report a payment as nonemployee compensation.

  1. You made the payment to someone who is not your employee;
  2. You made the payment for services in the course of your trade or business (including government agencies and nonprofit organizations);
  3. You made the payment to an individual, partnership, estate, or in some cases, a corporation; and
  4. You made payments to the payee of at least $600 during the year.

The Form 1099-MISC, Miscellaneous Income, is transmitted with the Form 1096, Annual Summary and Transmittal of U.S. Information Returns, which is similar to a cover letter for your Forms 1099-MISC.

Refer to Instructions for Form 1099-MISC (PDF) , and Publication 1220, Specifications for Filing Form 1098, 1099, 5498 and W-2G Magnetically or Electronically for more information.

Information Reporting Call Site
The IRS operates a centralized call site to answer questions about reporting on Form 1099 and other information returns. If you have questions related to reporting on information returns, call (304) 263-8700.

Refer to the Classifying Employees and Independent Contractors page for help in distinguishing between the two.

State of New Hampshire Reporting Requirements

The State of New Hampshire requires that you use a NEW HIRE REPORTING FORM to report the name, address, Social Security Number and date of hire of any new or rehired independent contractors.  For more information and guidelines refer to the NH New Hire Guide for Hiring Independent Contractors.

 

     
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