Form 1099-NEC
Quick definition
The form payers issue to report $2,000+ in nonemployee compensation (2026 threshold, raised from $600). If you got one, you are self-employed for IRS purposes.
1099-NEC stands for "Nonemployee Compensation." For 2026, any business that paid you $2,000 or more for services as a non-employee in a year is required to send you a 1099-NEC. The One Big Beautiful Bill raised this threshold from $600 to $2,000 for payments made on or after January 1, 2026. Receiving one means the IRS considers you self-employed for that income.
Who gets 1099-NEC
Freelancers, gig drivers (Uber, DoorDash, Lyft), independent contractors in trades and services, real estate agents, and anyone paid for services without W-2 withholding. Uber drivers and DoorDash drivers typically receive 1099-NEC each year.
Why it matters for mileage
1099 income is reported on Schedule C, which is where the mileage deduction lives. A driver with $40,000 in 1099 income and 30,000 business miles split evenly across 2026 can deduct about $22,275 (15,000 miles at 72.5¢ plus 15,000 at 76¢), reducing both income tax and self-employment tax.
Related terms
Schedule C
The federal form self-employed workers use to report business income and expenses, including the mileage deduction.
Schedule SE
The federal form that calculates self-employment tax (Social Security + Medicare) for self-employed workers.
Independent Contractor
A worker classified as self-employed for tax purposes. Receives 1099 income instead of W-2 wages.
Self-Employment Tax
The 15.3% tax on net self-employment income that funds Social Security and Medicare.
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