1099

A 1099 is a tax form used to report payments made to independent contractors—workers who are not employees. If you pay a subcontractor $600 or more in a year, you must issue them a 1099-NEC.

A 1099 signals that the worker runs their own business. They control how and when the work is done, provide their own tools, carry their own insurance, pay their own taxes, and may work for multiple clients. For home improvement contractors, 1099 subcontractors are common for specialized trades like plumbing, electrical, HVAC, and masonry.

Classifying a worker as 1099 doesn’t remove legal responsibilities—you must use only properly licensed subcontractors in NYC, and misclassification can trigger IRS penalties, state audits, and DCWP violations.