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# Form 1099-NEC, Nonemployee Compensation - Document Skill

> Extract data from IRS Form 1099-NEC (Nonemployee Compensation): payments of $600 or more to non-employees such as independent contractors and freelancers.

The **Form 1099-NEC, Nonemployee Compensation** skill extracts data from Forms 1099-NEC, which are annual reports about payments carried out by a taxpayer to non-employees. This report is provided to both the US Internal Revenue Service (IRS) and each recipient of such payments. The taxpayer has to compile a separate report for each such non-employee receiving payments from the taxpayer of at least 600 USD during the reporting year.

The Form 1099-NEC, Nonemployee Compensation skill is a preview skill. It has been trained on a limited set of documents and is designed to help you quickly get started with processing Forms 1099-NEC. For production use, you may need to uptrain the skill with your own document samples.

This skill recognizes handwritten text. The option is enabled by default. If you do not import handwritten forms, disable the **Handwritten** option in the skill settings.

## Countries and Languages

| Countries | Languages |
| :-------- | :-------- |
| USA       | English   |

## Extracted Fields

### Basic Form Information

| Field     | Description                                                                            |
| :-------- | :------------------------------------------------------------------------------------- |
| Void      | Specifies that the processed form should be annulled.                                  |
| Corrected | Specifies that the processed form is being submitted to correct data provided earlier. |
| Year      | The reporting fiscal year.                                                             |

### Payer Details

| Field    | Description                                       |
| :------- | :------------------------------------------------ |
| Name     | The name, address, and phone number of the payer. |
| Street   | The name, address, and phone number of the payer. |
| City     | The name, address, and phone number of the payer. |
| State    | The name, address, and phone number of the payer. |
| ZIP Code | The name, address, and phone number of the payer. |
| Country  | The name, address, and phone number of the payer. |
| Phone    | The name, address, and phone number of the payer. |

### Tax Identification Numbers

| Field           | Description                                                                         |
| :-------------- | :---------------------------------------------------------------------------------- |
| Payer's TIN     | The tax identification number assigned to the taxpayer.                             |
| Recipient's TIN | The tax identification number assigned to the recipient of the taxpayer's payments. |

### Recipient Details

| Field    | Description                                    |
| :------- | :--------------------------------------------- |
| Name     | The name and address of the payment recipient. |
| Street   | The name and address of the payment recipient. |
| City     | The name and address of the payment recipient. |
| State    | The name and address of the payment recipient. |
| ZIP Code | The name and address of the payment recipient. |
| Country  | The name and address of the payment recipient. |

### Account and Payment Information

| Field                                            | Description                                                                |
| :----------------------------------------------- | :------------------------------------------------------------------------- |
| Account Number                                   | The unique number used by the taxpayer to identify the payment recipient.  |
| Nonemployee Compensation                         | The total amount received by the payment recipient from the taxpayer.      |
| Payer Made Direct Sales Totalling \$5000 or More | Specifies that the taxpayer made direct sales totalling at least 5000 USD. |
| Federal Income Tax Withheld                      | The total amount withheld as federal income tax.                           |

### State Tax Information

| Field                        | Description                         |
| :--------------------------- | :---------------------------------- |
| State Tax Withheld 1         | State-specific payment information. |
| State Tax Withheld 2         | State-specific payment information. |
| State/Payer's State Number 1 | State-specific payment information. |
| State/Payer's State Number 2 | State-specific payment information. |
| State Income 1               | State-specific payment information. |
| State Income 2               | State-specific payment information. |

## Key Fields

* Year
* Payer Details/Name
* Payer's TIN
* Recipient's TIN
* Recipient Details/Name
* Account Number
* Nonemployee Compensation

## Validation Rules

| Rule               | Description                                                                                                                                                                                                                                                                                                                               |
| :----------------- | :---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
| Complete Form Year | Checks the value in the **Year** field. It removes any white spaces and converts a 2-digit year into a 4-digit format. If the last two digits are numeric and start with 9, it converts the value to the 1900's (for example, 99 converts to 1999). Otherwise, it assumes the date is from the 2000's (for example, 24 converts to 2024). |