How the tool decides
- Personal payments are never reportable: 1099 rules apply only to payments made in the course of a trade or business (rental activity counts as a business for this purpose).
- Card and third-party-network payments are reported by the payment settlement entity on 1099-K, not by you. Paying a contractor by card removes your 1099-NEC obligation for that payment.
- Corporations are exempt from 1099-NEC/MISC reporting, with two exceptions the tool applies: attorney fees and gross proceeds paid to attorneys, and medical and health-care payments, are reportable even to corporations.
- Tax-exempt organizations and government entities are exempt payees for 1099-NEC/MISC.
- Foreign persons are outside the 1099 regime; they document on a W-8 and U.S.-source payments are reported on 1042-S. See the foreign vendors guide.
- Employees get a W-2; paying an employee for employee work on a 1099 is misclassification, not a reporting choice.
- Goods and accountable-plan reimbursements are not reportable payments.
- Thresholds: $600 for services, rent, prizes, medical and attorney fees paid in 2025; $2,000 for those paid in 2026 (indexed from 2027). Royalties $10. Interest $10 (or $600 for interest paid in the course of business other than by a bank). Dividends $10. Backup withholding applies to any reportable amount regardless of threshold if the TIN is missing. See the 2026 figures.
The answer is the federal rule for the common case. Unusual arrangements (payments to a deceased employee's estate, fishing-boat crews, direct sales, crop insurance, and others) have their own boxes and rules; the General Instructions list them.