The 1099-K and 1099-NEC forms are two different types of tax forms issued by the Internal Revenue Service (IRS). The 1099-K is used to report payments made to independent contractors, such as Uber drivers, from third-party networks like PayPal or a credit card processor. This form reports the gross amount of payments made to the contractor and is used for tax reporting purposes. The 1099-NEC, on the other hand, is used to report non-employee compensation for services provided to a business. This form reports the net amount of the contractor’s income for the year, not the gross amount. The 1099-NEC is a relatively new form and was introduced in 2020.
In summary, the 1099-K form is used to report payments made to independent contractors from third-party networks, while the 1099-NEC form is used to report the net income of the contractor for the year. The 1099-K form reports the gross amount of payments made to the contractor, while the 1099-NEC form reports the net income. The 1099-NEC form is a new form that was introduced in 2020.