How-to · 1099-NEC

How to find the payees you may need to send a 1099-NEC, from your bank statements

If you paid someone who isn't your employee for services in your business, you may need to send them and the IRS a Form 1099-NEC. Pennyrow adds up your business payments by payee for the year and lists the payees at or over the IRS amount, so you have a short list to check instead of a year of statements to read. It gives facts from your statements, not advice on who has to file.

Free during the beta. Planned from Jan 4, 2027: part of the Tax Year Pass.

The IRS rules in short

This is a summary of the IRS Instructions for Forms 1099-MISC and 1099-NEC (links at the bottom). Read them, or ask your tax preparer, for your own case.

• Who: payments made in the course of your trade or business to someone who isn't your employee. Personal payments aren't reportable.
• How much: $2,000 or more in a year for 2026 and later, an amount that may be adjusted for inflation from 2027. It was $600 for earlier years.
• When: the Form 1099-NEC goes to the payee and to the IRS by January 31. When January 31 falls on a weekend, the due date moves to the next business day.
• Card and payment-network payments: payments made by credit card or through a third-party payment network aren't reported on a 1099-NEC. The card company or network reports them on Form 1099-K.
• Corporations: payments to a corporation usually don't need one. Payments for legal services are an exception.
• Rent: rent of $2,000 or more is reported on Form 1099-MISC, not a 1099-NEC.

To file, you need each payee's legal name and taxpayer ID, which you collect on a Form W-9.

How Pennyrow builds the list

1. You tell Pennyrow which accounts are for the business, on the Catch-up tab. Only business payments count.
2. It takes the money paid out of your checking and savings accounts that year. Transfers between your accounts, card payments, tax payments, loan payments and owner draws aren't payments to a payee, so they are left out.
3. It groups what is left by payee name, as the statement prints it.
4. It lists each payee whose total for the year is at or over the IRS amount ($600 for years before 2026, $2,000 from 2026), largest first, with the number of payments and the category it suggests.
5. For each payee you can choose “Not a contractor”. It moves to a separate list, and you can undo it.

What it leaves out, and says so

• Card payments and payments through payment apps. The card company or the app reports those on Form 1099-K. Pennyrow shows how many it left out.
• Accounts of unknown type. If an account isn't set as checking, savings or a card, its business payments are left out until you set it, and Pennyrow tells you which account.
• Utilities, insurance, taxes and interest. These usually go to companies that don't get a 1099-NEC, so those payees are counted but not listed.
• Rent. Landlords go in a separate list, to check for a Form 1099-MISC.
• Checks. A statement usually shows a check only as a number, with no payee name. Pennyrow can't add up checks to the same person, so look through your check register for those.

Worked example from the built-in sample

The sample is made up and covers 2025, when the line was $600. Its business checking account has two payees at or over it:

Rent goes in its own list: FERNMOOR COWORK RENT, 11 payments, $4,950.00, to check for a Form 1099-MISC. Another 2 payees, $1,965.66 in all, were counted but not listed because they are insurance and utilities.

The same statements for 2026 would be checked against $2,000 instead. Neither payee in the table is at that amount, and the coworking rent still is. The line moves the list a lot, which is why the page tells you which one it used.

Ways to use the list

• For each payee, a few questions help: was this for services to my business, and is the payee a person or an unincorporated business rather than a corporation?
• Mark “Not a contractor” for any that aren't, so the list shrinks to the ones that need a decision.
• Many people then collect a Form W-9 from the payees that are contractors and take the list to their tax preparer. Your preparer decides who gets a form.

Questions

Does Pennyrow file 1099 forms?

No. It makes a list of payees to check from your statements. It never says who has to file and it doesn't send anything to the IRS or to a payee.

I paid a contractor by credit card. Do I send a 1099-NEC?

Under the IRS instructions, payments made by credit card or through a third-party payment network are reported on Form 1099-K by the card company or network, not on a 1099-NEC. Pennyrow counts them apart and doesn't list them. Your preparer can confirm how this applies to your own payments.

Which year's amount does Pennyrow use?

$2,000 for payments made in 2026 and later, and $600 for earlier years. The IRS says the amount may be adjusted for inflation from 2027, so Pennyrow reminds you to check the IRS publication for later years.

Why isn't a payee I paid $1,900 on the list?

It may be under the amount, paid by card or through a payment app, paid from an account that isn't set as business, in a category such as insurance or utilities that usually goes to companies, marked “Not a contractor”, or paid by several checks, which Pennyrow can't add together.

Is the payees list free?

It is free during the beta. It is planned to become part of the Tax Year Pass on Jan 4, 2027, along with two other tax-time tools. The statement converter stays free.

Related

• How to catch up on a year of bookkeeping yourself
• Schedule C expense categories for your bank and card transactions
• Convert an OFX or QFX file to CSV or Excel

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Checked October 22, 2026 against IRS: Instructions for Forms 1099-MISC and 1099-NEC (current revision), IRS: Instructions for Forms 1099-MISC and 1099-NEC, 2025 (the source for the $600 amount). Pages move; if something has changed, the source has the current version.