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Reporting Settlement Payments to Former Employees: 1099-MISC or 1099-NEC?
November 13, 2025
Q. We made a settlement payment to a former employee, and their attorney is requesting that this settlement be reported on a 1099-MISC form. I disagree with this classification, as I believe this individual is not an employee and that the payment should instead be reported on a 1099-NEC form. The attorney has now involved our Legal Department to revise the 1099. Please advise me on which 1099 form should be used.
A.
(Answered by IOFM's third-party tax expert)
It depends on what the settlement…
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