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Nonemployee Compensation Definition

When someone performing a service or providing a product is determined not to be an employee, compensation is paid as a nonemployee. This non-employee compensation occurs most frequently with self-employed individuals.

Nonemployee Compensation Extended Definition
You pay nonemployee compensation to individuals who do work for you that are not your employees. The most common nonemployee compensation is paid to the self-employed. In these situations, you report non-employee compensation on Form 1099-NEC.

Last Updated By

Rachel Blakely-Gray | Apr 17, 2023

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