Miscellaneous Income

2013

Department of the Treasury
Internal Revenue Service

Instructions for
Form 1099-MISC
Miscellaneous Income
Section references are to the Internal Revenue Code
unless otherwise noted.

Future Developments

For the latest information about developments related to
Form 1099-MISC and its instructions, such as legislation
enacted after they were published, go to www.irs.gov/
form1099misc.

What's New
Pilot program for truncating an individual's identifying number on paper payee statements has ended.
Filers of Form 1099-MISC must show the recipient's
complete identifying number on all copies of the form.
Backup withholding rate. At the time these instructions
went to print, Congress was considering legislation that
would reduce the backup withholding rate. To find out if
this legislation was enacted, and for more details, go to
www.irs.gov/form1099misc.

Reminder

In addition to these specific instructions, you should also
use the 2013 General Instructions for Certain Information
Returns. Those general instructions include information
about the following topics.
Backup withholding.
Electronic reporting requirements.
Penalties.
Who must file (nominee/middleman).
When and where to file.
Taxpayer identification numbers.
Statements to recipients.
Corrected and void returns.
Other general topics.
You can get the general instructions from www.irs.gov/
form1099misc or by calling 1-800-TAX-FORM
(1-800-829-3676).

Specific Instructions

File Form 1099-MISC, Miscellaneous Income, for each
person to whom you have paid during the year:
At least $10 in royalties (see the instructions for box 2)
or broker payments in lieu of dividends or tax-exempt
interest (see the instructions for box 8);
At least $600 in rents, services (including parts and
materials), prizes and awards, other income payments,
medical and health care payments, crop insurance
proceeds, cash payments for fish (or other aquatic life)
you purchase from anyone engaged in the trade or
business of catching fish, or, generally, the cash paid from

Oct 31, 2012

a notional principal contract to an individual, partnership,
or estate;
Any fishing boat proceeds; or
Gross proceeds of $600 or more paid to an attorney.
See Payments to attorneys, later.
In addition, use Form 1099-MISC to report that you
made direct sales of at least $5,000 of consumer products
to a buyer for resale anywhere other than a permanent
retail establishment. You must also file Form 1099-MISC
for each person from whom you have withheld any federal
income tax under the backup withholding rules regardless
of the amount of the payment.
Be sure to report each payment in the proper box
because the IRS uses this information to
CAUTION
determine whether the recipient has properly
reported the payment.

!

Trade or business reporting only. Report on Form
1099-MISC only when payments are made in the course
of your trade or business. Personal payments are not
reportable. You are engaged in a trade or business if you
operate for gain or profit. However, nonprofit
organizations are considered to be engaged in a trade or
business and are subject to these reporting requirements.
Other organizations subject to these reporting
requirements include trusts of qualified pension or
profit-sharing plans of employers, certain organizations
exempt from tax under section 501(c) or (d), farmers'
cooperatives that are exempt from tax under section 521,
and widely held fixed investment trusts. Payments by
federal, state, or local government agencies are also
reportable.
Exceptions. Some payments do not have to be reported
on Form 1099-MISC, although they may be taxable to the
recipient. Payments for which a Form 1099-MISC is not
required include all of the following.
Generally, payments to a corporation. But see
Reportable payments to corporations, later.
Payments for merchandise, telegrams, telephone,
freight, storage, and similar items.
Payments of rent to real estate agents. But the real
estate agent must use Form 1099-MISC to report the rent
paid over to the property owner. See Regulations section
1.6041-1(e)(5), Example 5, and the instructions for box 1.
Wages paid to employees (report on Form W-2, Wage
and Tax Statement).
Military differential wage payments made to employees
while they are on active duty in the Armed Forces or other
uniformed services (report on Form W-2).
Business travel allowances paid to employees (may be
reportable on Form W-2).

Cat. No. 27982J

Substitute payments in lieu of dividends or tax-exempt
interest reported in box 8.
Payments by a federal executive agency for services
(vendors) reported in box 7.

Cost of current life insurance protection (report on Form
W-2 or Form 1099-R, Distributions From Pensions,
Annuities, Retirement or Profit-Sharing Plans, IRAs,
Insurance Contracts, etc.).
Payments to a tax-exempt organization including
tax-exempt trusts (IRAs, HSAs, Archer MSAs, and
Coverdell ESAs), the United States, a state, the District of
Columbia, a U.S. possession, or a foreign government.
Payments made to or for homeowners from the HFA
Hardest Hit Fund or the Emergency Homeowners' Loan
Program or similar state program (report on Form
1098-MA).
Form 1099-K. Payments made with a credit card or
payment card and certain other types of payments,
including third party network transactions, must be
reported on Form 1099-K by the payment settlement
entity under section 6050W and are not subject to
reporting on Form 1099-MISC. See the separate
Instructions for Form 1099-K.
Fees paid to informers. A payment to an informer as
an award, fee, or reward for information about criminal
activity does not have to be reported if the payment is
made by a federal, state, or local government agency, or
by a nonprofit organization exempt from tax under section
501(c)(3) that makes the payment to further the charitable
purpose of lessening the burdens of government. For
more information, see Regulations section 1.6041-3(l).
Scholarships. Do not use Form 1099-MISC to report
scholarship or fellowship grants. Scholarship or fellowship
grants that are taxable to the recipient because they are
paid for teaching, research, or other services as a
condition for receiving the grant are considered wages
and must be reported on Form W-2. Other taxable
scholarship or fellowship payments (to a degree or
nondegree candidate) do not have to be reported by you
to the IRS on any form. See section 117(b)-(d) and
Regulations section 1.6041-3(n) for more information.
Difficulty-of-care payments. Do not use Form
1099-MISC to report difficulty-of-care payments that are
excludable from the recipient's gross income.
Difficulty-of-care payments to foster care providers are not
reportable if paid for fewer than 11 children under age 19
and fewer than six individuals age 19 or older. Amounts
paid for more than 10 children or more than five other
individuals are reportable on Form 1099-MISC.

Federal executive agencies may also have to file
Form 8596, Information Return for Federal
CAUTION
Contracts, and Form 8596-A, Quarterly
Transmittal of Information Returns for Federal Contracts, if
a contracted amount for personal services is more than
$25,000. See Rev. Rul. 2003-66, which is on page 1115
of Internal Revenue Bulletin 2003-26 at www.irs.gov/pub/
irs-irbs/irb03-26.pdf for details.

!

Payments to attorneys. The term attorney includes a
law firm or other provider of legal services. Attorneys' fees
of $600 or more paid in the course of your trade or
business are reportable in box 7 of Form 1099-MISC.
Gross proceeds paid to attorneys. Under section
6045(f), report in box 14 payments that:
Are made to an attorney in the course of your trade or
business in connection with legal services, for example,
as in a settlement agreement,
Total $600 or more, and
Are not reportable by you in box 7.
Generally, you are not required to report the claimant's
attorney's fees. For example, an insurance company pays
a claimant's attorney $100,000 to settle a claim. The
insurance company reports the payment as gross
proceeds of $100,000 in box 14. The insurance company
does not have a reporting requirement for the claimant's
attorney's fees subsequently paid from these funds.
These rules apply whether or not the legal services are
provided to the payer and whether or not the attorney is
exclusive payee (for example, the attorney's and
claimant's names are on one check) or other information
returns are required for some or all of a payment under
section 6041A(a)(1). For example, a person who, in the
course of a trade or business, pays $600 of taxable
damages to a claimant by paying that amount to a
claimant's attorney is required to furnish Form 1099-MISC
to the claimant under section 6041 and furnish Form
1099-MISC to the claimant's attorney under section
6045(f). For more examples and exceptions relating to
payments to attorneys, see Regulations section 1.6045-5.
However, these rules do not apply to wages paid to
attorneys that are reportable on Form W-2 or to profits
distributed by a partnership to its partners that are
reportable on:
Schedule K-1 (Form 1065), Partner's Share of Income,
Deductions, Credits, etc., or
Schedule K-1 (Form 1065-B), Partner's Share of
Income (Loss) From an Electing Large Partnership.
Payments to corporations for legal services. The
exemption from reporting payments made to corporations
does not apply to payments for legal services. Therefore,
you must report attorneys' fees (in box 7) or gross
proceeds (in box 14) as described earlier to corporations
that provide legal services.
Taxpayer identification numbers (TINs). To report
payments to an attorney on Form 1099-MISC, you must
obtain the attorney's TIN. You may use Form W-9,
Request for Taxpayer Identification Number and

Canceled debt. A canceled debt is not reportable on
Form 1099-MISC. Canceled debts must be reported on
Form 1099-C, Cancellation of Debt, by financial
institutions, credit unions, Federal Government agencies,
certain agencies connected with the Federal Government,
and an organization where the lending of money (such as
finance and credit card companies) is a significant trade
or business. See the Instructions for Forms 1099-A and
1099-C.
Reportable payments to corporations. The following
payments made to corporations generally must be
reported on Form 1099-MISC.
Medical and health care payments reported in box 6.
Fish purchases for cash reported in box 7.
Attorneys' fees reported in box 7.
Gross proceeds paid to an attorney reported in box 14.
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Instructions for Form 1099-MISC (2013)

(less the social security and Medicare taxes withheld) was
paid to A's estate on July 20, 2013. Because X made the
payment during the year of death, X must withhold social
security and Medicare taxes on the $3,000 payment and
must complete Form W-2 as follows.
Box 1—10000.00 (does not include the $3,000 accrued
wages and vacation pay)
Box 2—1500.00
Box 3—13000.00 (includes the $3,000 accrued wages
and vacation pay)
Box 4—Social security tax withheld on the amount in
box 3
Box 5—13000.00 (includes the $3,000 accrued wages
and vacation pay)
Box 6—Medicare tax withheld on the amount in box 5
Employer X also must complete Form 1099-MISC as
follows.
Boxes for recipient's name, address, and TIN—the
estate's name, address, and TIN.
Box 3—3000.00 (Even though amounts were withheld
for social security and Medicare taxes, the gross amount
is reported here.)
If Employer X made the payment after the year of
death, the $3,000 would not be subject to social security
and Medicare taxes and would not be shown on Form
W-2. However, the employer would still file Form
1099-MISC.

Certification, to obtain the attorney's TIN. An attorney is
required to promptly supply its TIN whether it is a
corporation or other entity, but the attorney is not required
to certify its TIN. If the attorney fails to provide its TIN, the
attorney may be subject to a penalty under section 6723
and its regulations, and you must backup withhold on the
reportable payments.
Fish purchases. If you are in the trade or business of
purchasing fish for resale, you must report total cash
payments of $600 or more paid during the year to any
person who is engaged in the trade or business of
catching fish. Report these payments in box 7. You are
required to keep records showing the date and amount of
each cash payment made during the year, but you must
report only the total amount paid for the year on Form
1099-MISC.
“Fish” means all fish and other forms of aquatic life.
“Cash” means U.S. and foreign coin and currency and a
cashier's check, bank draft, traveler's check, or money
order. Cash does not include a check drawn on your
personal or business account.
Deceased employee's wages. If an employee dies
during the year, you must report the accrued wages,
vacation pay, and other compensation paid after the date
of death. If you made the payment in the same year the
employee died, you must withhold social security and
Medicare taxes on the payment and report them only as
social security and Medicare wages on the employee's
Form W-2 to ensure that proper social security and
Medicare credit is received. On the Form W-2, show the
payment as social security wages (box 3) and Medicare
wages and tips (box 5) and the social security and
Medicare taxes withheld in boxes 4 and 6; do not show
the payment in box 1 of Form W-2.
If you made the payment after the year of death, do not
report it on Form W-2, and do not withhold social security
and Medicare taxes.
Whether the payment is made in the year of death or
after the year of death, you also must report the payment
to the estate or beneficiary on Form 1099-MISC. Report
the payment in box 3 (rather than in box 7 as specified in
Rev. Rul. 86-109, 1986-2 C.B. 196). See the Example that
follows. Enter the name and TIN of the payment recipient
on Form 1099-MISC. For example, if the recipient is an
individual beneficiary, enter the name and social security
number of the individual; if the recipient is the estate, enter
the name and employer identification number of the
estate. The general backup withholding rules apply to this
payment.
Death benefits from nonqualified deferred
compensation plans or section 457 plans paid to the
estate or beneficiary of a deceased employee are
reportable on Form 1099-MISC. Do not report these death
benefits on Form 1099-R. However, if the benefits are
from a qualified plan, report them on Form 1099-R. See
the Instructions for Forms 1099-R and 5498.

Employee business expense reimbursements. Do
not use Form 1099-MISC to report employee business
expense reimbursements. Report payments made to
employees under a nonaccountable plan as wages on
Form W-2. Generally, payments made to employees
under an accountable plan are not reportable on Form
W-2, except in certain cases when you pay a per diem or
mileage allowance. For more information, see the
Instructions for Forms W-2 and W-3; Pub. 463, Travel,
Entertainment, Gift, and Car Expenses; and Pub. 1542,
Per Diem Rates. For information on reporting employee
moving expense reimbursements on Form W-2, see the
Instructions for Forms W-2 and W-3.
Independent contractor or employee. Generally, you
must report payments to independent contractors on
Form 1099-MISC in box 7. See the instructions for box 7.
Section 530 of the Revenue Act of 1978 as
extended by section 269(c) of P.L. 97-248 deals
with the employment tax status of independent
contractors and employees. To qualify for relief under
section 530, employers must file Form 1099-MISC.
Additional requirements for relief are discussed in Rev.
Proc. 85-18, 1985-1 C.B. 518. Also see Pub. 15-A,
Employer's Supplemental Tax Guide, for special rules that
may apply to technical service specialists and test
proctors and room supervisors.

TIP

Transit passes and parking for independent contractors. Although you cannot provide qualified
transportation fringes to independent contractors, the
working condition and de minimis fringe rules for transit
passes and parking apply to independent contractors.
Tokens or farecards that enable an independent
contractor to commute on a public transit system (not

Example. Before Employee A's death on June 15,
2013, A was employed by Employer X and received
$10,000 in wages on which federal income tax of $1,500
was withheld. When A died, X owed A $2,000 in wages
and $1,000 in accrued vacation pay. The total of $3,000
Instructions for Form 1099-MISC (2013)

-3-

including privately operated van pools) are excludable
from the independent contractor's gross income and are
not reportable on Form 1099-MISC if their value in any
month is $21 or less. However, if the value of a pass
provided in a month is greater than $21, the full value is
includible in gross income and is reportable on Form
1099-MISC. The value of parking may be excludable from
an independent contractor's gross income, and, therefore,
not reportable on Form 1099-MISC if certain requirements
are met. See Regulations section 1.132-9(b), Q/A-24.

that includes the information provided to the IRS on Forms
1099, as well as additional information identified in
Regulations section 1.671-5(e), must be furnished to
TIHs. For details, see the 2013 General Instructions for
Certain Information Returns.

Directors' fees. You must report directors' fees and
other remuneration, including payments made after
retirement, on Form 1099-MISC in the year paid. Report
them in box 7.

2nd TIN not. You may enter an “X” in this box if you were
notified by the IRS twice within 3 calendar years that the
payee provided an incorrect TIN. If you mark this box, the
IRS will not send you any further notices about this
account. However, if you received both IRS notices in the
same year, or if you received them in different years but
they both related to information returns filed for the same
year, do not check the box at this time. For purposes of
the two-notices-in-3-years rule, you are considered to
have received one notice. You are not required to send a
second “B” notice upon receipt of the second notice. See
part N in the 2013 General Instructions for Certain
Information Returns for more information.

Statements to recipients. If you are required to file
Form 1099-MISC, you must provide a statement to the
recipient. For more information about the requirement to
furnish a statement to each recipient, see part M in the
2013 General Instructions for Certain Information Returns.

Commissions paid to lottery ticket sales agents. A
state that has control over and responsibility for online and
instant lottery games must file Form 1099-MISC to report
commissions paid, whether directly or indirectly, to
licensed sales agents. For example, State X retains
control over and liability for online and instant lottery
games. For online ticket sales, State X pays commissions
by allowing an agent to retain 5% of the ticket proceeds
the agent remits to State X. For instant ticket sales, State
X pays commissions by providing tickets to the agent for
5% less than the proceeds to be obtained by the agent
from the sale of those tickets. If the commissions for the
year total $600 or more, they must be reported in box 7 on
Form 1099-MISC. See Rev. Rul. 92-96, 1992-2 C.B. 281.

TIP

For information on the TIN Matching System
offered by the IRS, see the 2013 General
Instructions for Certain Information Returns.

Recipient's Identification Number

Escrow agent; construction project. When an escrow
agent maintains owner-provided funds in an escrow
account for a construction project, performs management
and oversight functions relating to the construction
project, and makes payments for the owner and the
general contractor, the escrow agent must file Form
1099-MISC for reportable payments of $600 or more. This
requirement applies whether or not the escrow agent is a
bank. If the contractor is the borrower of the funds, do not
report on Form 1099-MISC any loan payments made to
the contractor/borrower.

Enter the recipient's identification number using hyphens
in the proper format. SSNs, ITINs, and ATINs should be in
the XXX-XX-XXXX format. EINs should be in the
XX-XXXXXXX format. You should make every effort to
insure that you have the correct type of number reported
in the correct format.

Account Number

The account number is required if you have multiple
accounts for a recipient for whom you are filing more than
one Form 1099-MISC. Additionally, the IRS encourages
you to designate an account number for all Forms
1099-MISC that you file. See part L in the 2013 General
Instructions for Certain Information Returns.

Indian gaming profits, payments to tribal members.
If you make payments to members of Indian tribes from
the net revenues of class II or class III gaming activities
conducted or licensed by the tribes, you must withhold
federal income tax on such payments. File Form
1099-MISC to report the payments and withholding to
tribal members. Report the payments in box 3 and the
federal income tax withheld in box 4. Pub. 15-A contains
the necessary “Tables for Withholding on Distributions of
Indian Gaming Profits to Tribal Members.”

Box 1. Rents

Enter amounts of $600 or more for all types of rents, such
as any of the following.
Real estate rentals paid for office space. However, you
do not have to report these payments on Form
1099-MISC if you paid them to a real estate agent. But the
real estate agent must use Form 1099-MISC to report the
rent paid over to the property owner. See Regulations
section 1.6041-1(e)(5), Example 5.
Machine rentals (for example, renting a bulldozer to
level your parking lot). If the machine rental is part of a
contract that includes both the use of the machine and the
operator, prorate the rental between the rent of the
machine (report that in box 1) and the operator's charge
(report that as nonemployee compensation in box 7).
Pasture rentals (for example, farmers paying for the use
of grazing land).

State or local sales taxes. If state or local sales taxes
are imposed on the service provider and you (as the
buyer) pay them to the service provider, report them on
Form 1099-MISC as part of the reportable payment.
However, if sales taxes are imposed on you (as the buyer)
and collected from you by the service provider, do not
report the sales taxes on Form 1099-MISC.
Widely held fixed investment trusts (WHFITs).
Trustees and middlemen of WHFITs must report items of
gross income attributable to a trust income holder (TIH) on
the appropriate Form 1099. A tax information statement
-4-

Instructions for Form 1099-MISC (2013)

Public housing agencies must report in box 1 rental
assistance payments made to owners of housing projects.
See Rev. Rul. 88-53, 1988-1 C.B. 384.
Coin-operated amusements. If an arrangement
between an owner of coin-operated amusements and an
owner of a business establishment where the
amusements are placed is a lease of the amusements or
the amusement space, the owner of the amusements or
the owner of the space, whoever makes the payments,
must report the lease payments in box 1 of Form
1099-MISC if the payments total at least $600. However, if
the arrangement is a joint venture, the joint venture must
file a Form 1065, U.S. Return of Partnership Income, and
provide each partner with the information necessary to
report the partner's share of the taxable income.
Coin-operated amusements include video games, pinball
machines, jukeboxes, pool tables, slot machines, and
other machines and gaming devices operated by coins or
tokens inserted into the machines by individual users. For
more information, see Rev. Rul. 92-49, 1992-1 C.B. 433.

box 2; report payments for working interests in box 7. Do
not report timber royalties made under a pay-as-cut
contract; report these timber royalties on Form 1099-S,
Proceeds From Real Estate Transactions.
Use box 2 to report royalty payments from intangible
property such as patents, copyrights, trade names, and
trademarks. Report the gross royalties (before reduction
for fees, commissions, or expenses) paid by a publisher
directly to an author or literary agent, unless the agent is a
corporation. The literary agent (whether or not a
corporation) that receives the royalty payment on behalf of
the author must report the gross amount of royalty
payments to the author on Form 1099-MISC whether or
not the publisher reported the payment to the agent on its
Form 1099-MISC.

Box 3. Other Income

Enter other income of $600 or more required to be
reported on Form 1099-MISC that is not reportable in one
of the other boxes on the form.

Box 2. Royalties

Also enter in box 3 prizes and awards that are not for
services performed. Include the fair market value (FMV) of
merchandise won on game shows. Also include amounts
paid to a winner of a sweepstakes not involving a wager. If
a wager is made, report the winnings on Form W-2G,
Certain Gambling Winnings.

Enter gross royalty payments (or similar amounts) of $10
or more. Report royalties from oil, gas, or other mineral
properties before reduction for severance and other taxes
that may have been withheld and paid. Do not include
surface royalties. They should be reported in box 1. Do
not report oil or gas payments for a working interest in

Illustrated example.
The completed Form 1099-MISC illustrates the following example. Z Builders is a contractor that subcontracts drywall work to
Ronald Green, a sole proprietor who does business as Y Drywall. During the year, Z Builders pays Mr. Green $5,500. Z Builders
must file Form 1099-MISC because they paid Mr. Green $600 or more in the course of their trade or business, and Mr. Green is
not a corporation.

9595

VOID

CORRECTED

PAYER’S name, street address, city or town, province or state, country, ZIP
or foreign postal code, and telephone no.

OMB No. 1545-0115

1 Rents

2013

$

Z Builders
123 Maple Avenue
Oaktown, AL 00000
555-555-1212

2 Royalties

Form 1099-MISC

$

PAYER’S country code

Check if branch reporting
elected

PAYER’S federal identification
number

3 Other income

4 Federal income tax withheld

$

$

5 Fishing boat proceeds

6 Medical and health care payments

$

$

7 Nonemployee compensation

8 Substitute payments in lieu of
dividends or interest

$ 5500.00

$

RECIPIENT’S identification
number

123-00-6789

10-9999999
RECIPIENT’S name

Ronald Green
dba/ Y Drywall

9 Payer made direct sales of
10 Crop insurance proceeds
$5,000 or more of consumer
products to a buyer
$
(recipient) for resale ▶

Street address (including apt. no.)

456 Flower Lane
City or town, province or state, country, and ZIP or foreign postal code

Oaktown, AL 00000

11 Foreign tax paid

2nd TIN not. 13 Excess golden parachute
payments

$
$
Form 1099-MISC

12 Foreign country or U.S. possession

$

Account number (see instructions)

15a Section 409A deferrals

Miscellaneous
Income

15b Section 409A income

$
Cat. No. 14425J

Copy A
For
Internal Revenue
Service Center
File with Form 1096.

For Privacy Act
and Paperwork
Reduction Act
Notice, see the
2013 General
Instructions for
Certain
Information
Returns.

14 Gross proceeds paid to an
attorney

$

16 State tax withheld

$
$

17 State/Payer’s state no.

18 State income

$
$

IRS.gov/form1099misc

Department of the Treasury - Internal Revenue Service

Do Not Cut or Separate Forms on This Page — Do Not Cut or Separate Forms on This Page

Instructions for Form 1099-MISC (2013)

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If the termination payments do not meet all these
requirements, report them in box 7.
5. Generally, all punitive damages, any damages for
nonphysical injuries or sickness, and any other taxable
damages. Report punitive damages even if they relate to
physical injury or physical sickness. Generally, report all
compensatory damages for nonphysical injuries or
sickness, such as employment discrimination or
defamation. However, do not report damages (other than
punitive damages):
a. Received on account of personal physical injuries
or physical sickness;
b. That do not exceed the amount paid for medical
care for emotional distress;
c. Received on account of nonphysical injuries (for
example, emotional distress) under a written binding
agreement, court decree, or mediation award in effect on
or issued by September 13, 1995; or
d. That are for a replacement of capital, such as
damages paid to a buyer by a contractor who failed to
complete construction of a building.

If, not later than 60 days after the winner
becomes entitled to the prize, the winner can
choose the option of a lump sum or an annuity
payable over at least 10 years, the payment of winnings is
considered made when actually paid. If the winner
chooses an annuity, file Form 1099-MISC each year to
report the annuity paid during that year.

TIP

Do not include prizes and awards paid to your
employees. Report these on Form W-2. Do not include in
box 3 prizes and awards for services performed by
nonemployees, such as an award for the top commission
salesperson. Report them in box 7.
Prizes and awards received in recognition of past
accomplishments in religious, charitable, scientific,
artistic, educational, literary, or civic fields are not
reportable if:
The winners are chosen without action on their part,
The winners are not expected to perform future
services, and
The payer transfers the prize or award to a charitable
organization or governmental unit under a designation
made by the recipient. See Rev. Proc. 87-54, 1987-2 C.B.
669.

Damages received on account of emotional distress,
including physical symptoms such as insomnia,
headaches, and stomach disorders, are not considered
received for a physical injury or physical sickness and are
reportable unless described in b or c above. However,
damages received on account of emotional distress due
to physical injuries or physical sickness are not reportable.
Also report liquidated damages received under the Age
Discrimination in Employment Act of 1967.

Other items required to be reported in box 3 include the
following.
1. Payments as explained earlier under Deceased
employee's wages.
2. Payments as explained earlier under Indian gaming
profits, payments to tribal members.
3. A payment or series of payments made to
individuals for participating in a medical research study or
studies.

Taxable back pay damages may be wages and
reportable on Form W-2. See Pub. 957,
Reporting Back Pay and Special Wage Payments
to the Social Security Administration.

TIP

4. Termination payments to former self-employed
insurance salespeople. These payments are not subject
to self-employment tax and are reportable in box 3 (rather
than box 7) if all the following apply.

Foreign agricultural workers. Report in box 3
compensation of $600 or more paid in a calendar year to
an H-2A visa agricultural worker who did not give you a
valid taxpayer identification number. You must also
withhold federal income tax under the backup withholding
rules. For more information, go to IRS.gov and enter
“foreign agricultural workers” in the search box.

a. The payments are received from an insurance
company because of services performed as an insurance
salesperson for the company.
b. The payments are received after termination of the
salesperson's agreement to perform services for the
company.
c. The salesperson did not perform any services for
the company after termination and before the end of the
year.
d. The salesperson enters into a covenant not to
compete against the company for at least 1 year after the
date of termination.
e. The amount of the payments depends primarily on
policies sold by the salesperson or credited to the
salesperson's account during the last year of the service
agreement or to the extent those policies remain in force
for some period after termination, or both.
f. The amount of the payments does not depend at all
on length of service or overall earnings from the company
(regardless of whether eligibility for payment depends on
length of service).

Box 4. Federal Income Tax Withheld

Enter backup withholding. For example, persons who
have not furnished their TIN to you are subject to
withholding on payments required to be reported in boxes
1, 2 (net of severance taxes), 3, 5 (to the extent paid in
cash), 6, 7 (except fish purchases for cash), 8, 10, and 14.
For more information on backup withholding, including the
rate, see part N in the 2013 General Instructions for
Certain Information Returns.
Also enter any income tax withheld from payments to
members of Indian tribes from the net revenues of class II
or class III gaming activities conducted or licensed by the
tribes.

Box 5. Fishing Boat Proceeds

Enter the individual's share of all proceeds from the sale
of a catch or the FMV of a distribution in kind to each crew

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Instructions for Form 1099-MISC (2013)

member of fishing boats with normally fewer than 10 crew
members. A fishing boat has normally fewer than 10 crew
members if the average size of the operating crew was
fewer than 10 on trips during the preceding 4 calendar
quarters.

What is nonemployee compensation? If the following
four conditions are met, you must generally report a
payment as nonemployee compensation.
You made the payment to someone who is not your
employee;
You made the payment for services in the course of
your trade or business (including government agencies
and nonprofit organizations);
You made the payment to an individual, partnership,
estate, or, in some cases, a corporation; and
You made payments to the payee of at least $600
during the year.

In addition, report cash payments of up to $100 per trip
that are contingent on a minimum catch and are paid
solely for additional duties (such as mate, engineer, or
cook) for which additional cash payments are traditional in
the industry. However, do not report on Form 1099-MISC
any wages reportable on Form W-2.

Box 6. Medical and Health Care Payments

Self-employment tax. Generally, amounts reportable in
box 7 are subject to self-employment tax. If payments to
individuals are not subject to this tax and are not
reportable elsewhere on Form 1099-MISC, report the
payments in box 3. However, report section 530 (of the
Revenue Act of 1978) worker payments in box 7.

Enter payments of $600 or more made in the course of
your trade or business to each physician or other supplier
or provider of medical or health care services. Include
payments made by medical and health care insurers
under health, accident, and sickness insurance programs.
If payment is made to a corporation, list the corporation as
the recipient rather than the individual providing the
services. Payments to persons providing health care
services often include charges for injections, drugs,
dentures, and similar items. In these cases the entire
payment is subject to information reporting. You are not
required to report payments to pharmacies for prescription
drugs.

Examples. The following are some examples of
payments to be reported in box 7.
Professional service fees, such as fees to attorneys
(including corporations), accountants, architects,
contractors, engineers, etc.
Fees paid by one professional to another, such as
fee-splitting or referral fees.
Payments by attorneys to witnesses or experts in legal
adjudication.
Payment for services, including payment for parts or
materials used to perform the services if supplying the
parts or materials was incidental to providing the service.
For example, report the total insurance company
payments to an auto repair shop under a repair contract
showing an amount for labor and another amount for
parts, if furnishing parts was incidental to repairing the
auto.
Commissions paid to nonemployee salespersons that
are subject to repayment but not repaid during the
calendar year.
A fee paid to a nonemployee, including an independent
contractor, or travel reimbursement for which the
nonemployee did not account to the payer, if the fee and
reimbursement total at least $600. To help you determine
whether someone is an independent contractor or an
employee, see Pub. 15-A.
Payments to nonemployee entertainers for services.
Use Form 1042-S, Foreign Person's U.S. Source Income
Subject to Withholding, for payments to nonresident
aliens.
Exchanges of services between individuals in the
course of their trades or businesses. For example, an
attorney represents a painter for nonpayment of business
debts in exchange for the painting of the attorney's law
offices. The amount reportable by each on Form
1099-MISC is the FMV of his or her own services
performed. However, if the attorney represents the painter
in a divorce proceeding, this is an activity that is unrelated
to the painter's trade or business. The attorney must
report on Form 1099-MISC the value of his or her
services. But the painter need not report on Form
1099-MISC the value of painting the law offices because
the work is in exchange for legal services that are
separate from the painter's business.

The exemption from issuing Form 1099-MISC to a
corporation does not apply to payments for medical or
health care services provided by corporations, including
professional corporations. However, you are not required
to report payments made to a tax-exempt hospital or
extended care facility or to a hospital or extended care
facility owned and operated by the United States (or its
possessions), a state, the District of Columbia, or any of
their political subdivisions, agencies, or instrumentalities.
Generally, payments made under a flexible
spending arrangement (as defined in section
CAUTION
106(c)(2)) or a health reimbursement
arrangement which is treated as employer-provided
coverage under an accident or health plan for purposes of
section 106 are exempt from the reporting requirements of
section 6041.

!

Box 7. Nonemployee Compensation

Enter nonemployee compensation of $600 or more.
Include fees, commissions, prizes and awards for
services performed as a nonemployee, other forms of
compensation for services performed for your trade or
business by an individual who is not your employee, and
fish purchases for cash. Include oil and gas payments for
a working interest, whether or not services are performed.
Also include expenses incurred for the use of an
entertainment facility that you treat as compensation to a
nonemployee. Federal executive agencies that make
payments to vendors for services, including payments to
corporations, must report the payments in this box. See
Rev. Rul. 2003-66, which is on page 1115 of Internal
Revenue Bulletin 2003-26 at www.irs.gov/pub/irs-irbs/
irb03-26.pdf.

Instructions for Form 1099-MISC (2013)

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Taxable fringe benefits for nonemployees. For
information on the valuation of fringe benefits, see Pub.
15-B, Employer's Tax Guide to Fringe Benefits.
Gross oil and gas payments for a working interest.
Payments to an insurance salesperson who is not your
common law or statutory employee. See Pub. 15-A for the
definition of employee. However, for termination
payments to former insurance salespeople, see the
instructions for box 3.
Directors' fees as explained under Directors' fees,
earlier.
Commissions paid to licensed lottery ticket sales
agents as explained under Commissions paid to lottery
ticket sales agents, earlier.
Payments to section 530 (of the Revenue Act of 1978)
workers. See the TIP under Independent contractor or
employee, earlier.
Fish purchases for cash. See Fish purchases, earlier.

Payments not reported in box 7. Do not report in
box 7, nor elsewhere on Form 1099-MISC, the cost of
current life insurance protection (report on Form W-2 or
Form 1099-R); an employee's wages, travel or auto
allowance, or bonuses (report on Form W-2); or the cost
of group-term life insurance paid on behalf of a former
employee (report on Form W-2).

Box 8. Substitute Payments in Lieu of Dividends
or Interest

Enter aggregate payments of at least $10 received by a
broker for a customer in lieu of dividends or tax-exempt
interest as a result of a loan of a customer's securities. For
this purpose, a customer includes an individual, trust,
estate, partnership, association, company, or corporation.
See Notice 2003-67, which is on page 752 of Internal
Revenue Bulletin 2003-40 at www.irs.gov/pub/irs-irbs/
irb03-40.pdf. It does not include a tax-exempt
organization, the United States, any state, the District of
Columbia, a U.S. possession, or a foreign government.
File Form 1099-MISC with the IRS and furnish a copy to
the customer for whom you received the payment. Also,
file Form 1099-MISC for and furnish a copy to an
individual for whom you received a payment in lieu of
tax-exempt interest.
Substitute payment means a payment in lieu of (a) a
dividend or (b) tax-exempt interest to the extent that
interest (including OID) has accrued while the securities
were on loan.

Nonqualified deferred compensation (Section 409A)
income. Include in box 7 the amount of all deferrals (plus
earnings) reported in box 15b that are includible in gross
income because the nonqualified deferred compensation
(NQDC) plan fails to satisfy the requirements of section
409A. See Regulations sections 1.409A-1 through
1.409A-6.
Golden parachute payments. A parachute payment is
any payment that meets all of the following conditions.
1. The payment is in the nature of compensation.
2. The payment is to, or for the benefit of, a
disqualified individual.
3. The payment is contingent on a change in the
ownership of a corporation, the effective control of a
corporation, or the ownership of a substantial portion of
the assets of a corporation (a change in ownership or
control).
4. The payment has (together with other payments
described in 1, 2, and 3, above, made to the same
individual) an aggregate present value of at least three
times the individual's base amount.

Box 9. Payer Made Direct Sales of $5,000 or
More

Enter an “X” in the checkbox for sales by you of $5,000 or
more of consumer products to a person on a buy-sell,
deposit-commission, or other commission basis for resale
(by the buyer or any other person) anywhere other than in
a permanent retail establishment. Do not enter a dollar
amount in this box.
If you are reporting an amount in box 7, you may also
check box 9 on the same Form 1099-MISC.
The report you must give to the recipient for these
direct sales need not be made on the official form. It may
be in the form of a letter showing this information along
with commissions, prizes, awards, etc.

A disqualified individual is one who at any time during
the 12-month period prior to and ending on the date of the
change in ownership or control of the corporation (the
disqualified individual determination period) was an
employee or independent contractor and was, in regard to
that corporation, a shareholder, an officer, or a highly
compensated individual.
For more details, see Regulations section 1.280G-1.
Also, see Rev. Proc. 2003-68, which is on page 398 of
Internal Revenue Bulletin 2003-34 at www.irs.gov/pub/irsirbs/irb03-34.pdf, concerning the valuation of stock
options for purposes of golden parachute payment rules.
For the treatment of unvested shares of restricted stock,
see Rev. Rul. 2005-39, available at www.irs.gov/irb/
2005-27_IRB/ar08.html.
Independent contractor. Enter in box 7 the total
compensation, including any golden parachute payment.
For excess golden parachute payments, see the box 13
reporting instructions.
For employee reporting of these payments, see Pub.
15-A.

Box 10. Crop Insurance Proceeds

Enter crop insurance proceeds of $600 or more paid to
farmers by insurance companies unless the farmer has
informed the insurance company that expenses have
been capitalized under section 278, 263A, or 447.

Boxes 11 and 12. Reserved

Make no entries in these boxes.

Box 13. Excess Golden Parachute Payments

Enter any excess golden parachute payments. An excess
parachute payment is the amount of the excess of any
parachute payment over the base amount (the average
annual compensation for services includible in the
individual's gross income over the most recent 5 tax
years). See Q/A-38 through Q/A-44 of Regulations section
1.280G-1 for how to compute the excess amount.
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Instructions for Form 1099-MISC (2013)

See Golden parachute payments, earlier, for more
information.

1099-MISC, Form W-2, or Form W-2c for a prior year.
Also, do not include amounts that are considered to be
subject to a substantial risk of forfeiture for purposes of
section 409A. For additional information, see Regulations
sections 1.409A-1 through 1.409A-6; Notice 2008-113,
available at www.irs.gov/irb/2008-51_IRB/ar12.html;
Notice 2008-115; Notice 2010-6, which is available at
www.irs.gov/irb/2010-03_IRB/ar08.html; and Notice
2010-80, available at www.irs.gov/irb/2010-51_IRB/
ar08.html.

Box 14. Gross Proceeds Paid to an Attorney

Enter gross proceeds of $600 or more paid to an attorney
in connection with legal services (regardless of whether
the services are performed for the payer). See Payments
to attorneys, earlier.

Box 15a. Section 409A Deferrals

You do not have to complete this box. For details, see
Notice 2008-115, available at www.irs.gov/irb/
2008-52_IRB/ar10.html.
If you complete this box, enter the total amount
deferred during the year of at least $600 for the
nonemployee under all nonqualified plans. The deferrals
during the year include earnings on the current year and
prior year deferrals. For additional information, see
Regulations sections 1.409A-1 through 1.409A-6.
For deferrals and earnings under NQDC plans for
employees, see the Instructions for Forms W-2 and W-3.

The amount included in box 15b is also includible in
box 7.

Boxes 16–18. State Information

These boxes, and Copies 1 and 2, are provided for your
convenience only and need not be completed for the IRS.
Use the state information boxes to report payments for up
to two states. Keep the information for each state
separated by the dash line. If you withheld state income
tax on this payment, you may enter it in box 16. In box 17,
enter the abbreviated name of the state and the payer's
state identification number. The state number is the
payer's identification number assigned by the individual
state. In box 18, you may enter the amount of the state
payment. Use Copy 1 to provide information to the state
tax department. Give Copy 2 to the recipient for use in
filing the recipient's state income tax return.

Box 15b. Section 409A Income

Enter all amounts deferred (including earnings on
amounts deferred) that are includible in income under
section 409A because the NQDC plan fails to satisfy the
requirements of section 409A. Do not include amounts
properly reported on a Form 1099-MISC, corrected Form

Instructions for Form 1099-MISC (2013)

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Index

To help us develop a more useful index, please let us know if you have ideas for index entries.
See “Comments and Suggestions” in the “Introduction” for the ways you can reach us.

A
Agricultural workers, foreign ......... 6
Armed Forces ............... ............. 1
Attorneys' fees and gross
proceeds ....................... 2, 7, 9
B
Backup withholding ................. 2, 6
Broker transactions ................. 1, 8
C
Canceled debt ........................... 2
Coin-operated amusements .......... 5
Commissions ......................... 4, 7
Construction project, escrow
agent .................................. 4
Consumer products of $5,000,
indicator for ....................... 1, 8
Corporations, payments to ........ 2, 7
Crop insurance proceeds .......... 1, 8
D
Damages .................. ................ 5
Deceased employee's wages .... .. 3, 6
Difficulty-of-care payments ........... 2
Directors' fees ....................... 4, 7
Direct sales of consumer products for
resale ............................... 1, 8
E
Excess golden parachute
payments ................ .............. 8
Exchange of services .................. 7
F
Fees ............................ 1, 2, 4, 7, 8
Fishing boat proceeds ................ 6
Fish purchases for cash ........ 3, 6, 8
Foreign agricultural workers ...... .... 6

Form 1099-K ............................. 2
Former insurance salesperson,
termination payments ........... 6, 8
Form W-9 ................................. 2
G
Golden parachute payments ...... .... 8
Gross proceeds, attorneys .... .. 2, 7, 9
H
Health care services,
payments ....................... 1, 2, 7
I
Independent contractor
payments .......................... 3, 7
Indian gaming profits .................. 4
Informants, fees ........................ 2
L
Lottery ticket agents,
commissions ..................... 4, 8
M
Medical payments ......................
Medical research payments ..........
Medical services payments ..........
Military differential payments ........
Miscellaneous income .................

2
6
7
1
1

N
Nonemployee compensation ......... 7
Nonqualified deferred
compensation .................... 8, 9
O
Other income ............................ 5

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P
Parking, value of ........................ 3
Payment card transactions ........ 1, 6
Prizes and awards ...................... 5
Punitive damages ...................... 5
Q
Qualified payment card agents
(QPCAs) ........................... 1, 6
R
Rents ................................... 1, 4
Royalties .............................. 1, 5
S
Scholarships ............................ 2
Section 409A deferrals ................ 9
Section 409A income ......... ....... 8, 9
Section 530 worker .............. 3, 7, 8
Self-employment tax ........... ......... 7
State and local sales taxes ....... ..... 4
Statements to recipients .............. 4
Substitute payments in lieu of
dividends or tax-exempt
interest ............................. 1, 8
T
Taxpayer identification
number ............................. 2, 4
Termination payments, insurance
salespeople ............. ........... 6, 8
Trade or business ...................... 1
Transit passes .......................... 3
W
Withholding:
Backup .............................. 2, 6
Indian gaming ...................... 4, 6