Drafts of 2026 Forms 1099-NEC and 1099-MISC

The IRS has released drafts of the 2026 versions of Form 1099-NEC and 1099-MISC.

1099-NEC Draft

There are still seven boxes on this form, but box 1 has some changes:

1.     Box 1a: nonemployee compensation. This is pay to your contractor; previously, this was simply “Box 1.”

2.     Box 1b: cash tips. These will be included in 1a, and represent the portion of tips paid to the contractor that qualify for a tip deduction on their (the contractor’s) personal tax return.

3.     Box 1c: Treasury tipped occupation code. This is a code, reflecting the industry your contractor is in. More in a bit.

4.     Box 1d: overtime compensation. If you pay qualifying overtime to your contractor, you will report it in box 1a along with all other compensation, and then break out the overtime portion separately in 1d.

1099-MISC Draft

The new boxes are the same as on the 1099-NEC, but the revisions are more substantial.

●      On the 2025 1099-MISC, “FATCA filing requirement” was box 13. On the 2026 draft, “FATCA filing requirement” is still on the form, but it doesn’t have a number anymore.

●      Box 13 now represents tips: 13a for cash tips, and 13b for the occupation code. If you pay qualifying tips to someone, these would already have been reported in box 3 (see further discussion below; could also be box 6).

●      Box 14 was grayed out on 2025 forms, but now represents overtime compensation. If you pay overtime to someone receiving a 1099-MISC, you will: report the overtime (along with all other compensation) in the appropriate box elsewhere on the form (such as box 3 or box 6) and then break out the overtime portion in box 14.

New OBBB Deductions

These boxes are to help facilitate the new deductions for tips and overtime on personal tax returns. Most of the time, you’ll report these items on a W-2, but once in a while, you might use a 1099. See this prior article (and upcoming articles as well) for a discussion of when a 1099 might apply in this situation.