1099s - Who, What, When, and Why
There are 2 types of 1099 forms.
- Form 1099-NEC is the required form for non-employee compensation. (NEC = Non-Employee Compensation.) This form must be provided to anyone you pay more than the current reporting threshold, which for 2025 taxes (filed in early 2026) is $600.
- Form 1099 – MISC is the form for rental payments (not rental income). If your church has paid rent to an individual or a business that is not incorporated in your state, you are required to file this form. If you are paying a property management company, hotel, a church or other non-profit, you are not required to file this form.
The Form 1099-NEC must usually be in the mail or e-filed by January 31 of each year, but any time after January 1 is fine. One copy goes to the person or business, another copy goes to the IRS along with Form 1096 as a coversheet.
The deadline for filing Form 1099-MISC is usually the end of February of each year, but you have to give a copy to the recipient by January 31 so let's just file them by January 31 as well.
Ignoring Form 1099 – NEC or 1099 - MISC is not a good option. The current penalty for failure to file the 2026 Form 1099-NEC by the deadline is from $60 to $340 per form, depending on how long past the deadline the form is issued.
Intentionally disregarding the requirement to file is subject to a minimum penalty of $680 per form, or 10% of the income reported on the form, with no maximum.
The dates and penalties can change each year so it is good to look them up to verify.
How do you know if you need to file Form 1099-NEC?
- Did you hire someone to provide a service for your church this year?
- Were they paid directly, as an independent contractor?
- Were they either an individual or a non-incorporated business?
- Did you pay them a total amount that is over the reporting threshold ($600 for 2025 taxes) over the course of the year?
If the answers are yes, the IRS requires that you fill out a Form 1099-NEC, giving one copy to the contractor and filing one copy with the IRS.
This does not apply to anyone who has been paid as an employee. Remember, the letters “NEC” stand for “Nonemployee Compensation.” So, if your church is paying someone as an employee through Conference Local Payroll, you do not need to file a 1099 – NEC on their income.
You also do not need to file 1099 on money paid to businesses that are incorporated in your state.
You also do not need to file a 1099 if the combined yearly total paid to a person or contractor was under the reporting threshold.
Exception: The "reporting threshold" rule doesn’t apply to Conference employees. If your church gave financial assistance or a gift of any amount to your pastor, teacher, or other church employee, including someone on local payroll, a Form 1099-NEC must be issued to that church employee for the amount of that gift or payment.
Here is a detailed list that will help you begin to sort it all out. Don’t start making your list yet. Jewel will help you with that in 1099s - Quick Start or in more detail in 1099s - Report Generation Details. Just study this list for now.
YES - 1099 Needed
Form 1099-NEC is needed if checks totaling more than the reporting threshold in a calendar year are paid directly to/for:
- Lawn service – business or person
- Cleaning the church – business or person
- Treasurer stipend
- Musicians or song leaders
- Evangelists or speaker for seminar, etc. (for the speaker’s fee, not for expense reimbursements)
- Plumbing, electrical, painting, roofing
- Remodeling or repairing of buildings or anything on church property
- Piano tuning
- Heating and air repair and/or installation
- Pest control
- Security monitoring
- Parking lot paving or sealing
- Window replacement
- Pressure washing
- Locksmith services
- Tree services
- Carpet replacement or cleaning
- New sign, if labor and materials are combined
- Any other Nonemployee Compensation for any type of services
- And don't forget to file Form 1099-Misc if you have rental payments to an individual or non-incorporated business.
NO - 1099 Not Needed
Form 1099-NEC is not needed for checks to/for:
- Your Conference – example: Remittance Checks
- Payroll or insurance to your Conference
- Adventist Book Center or Pacific Press or any magazines or books
- Any school, church or other non-profit entity
- Property taxes
- Any purchases of products, equipment, food, supplies
- Utility, water, phone, cable or Internet payments
- Reimbursements to members when they turn in receipts
- Credit card payments
- Rental income (not payments)
- Benevolent fund disbursements