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Mamaban
New Member

1099-NEC for 2022 work, payed in 2023

I was a 1099 contractor in 2022 for a company that hired me in January 2023. However they paid my last invoice in January 2023 for work performed in December 2022. I did not complete any contract work in 2023. They sent me a 1099-NEC for that final invoice for $700. Do I have to pay self-employment tax? Is there any way to file that on my personal taxes instead? I can't claim any home office deductions as my "business" wasn't operational in 2023. Am I missing something? Also do I say I "materially participated" in the business in 2023 even though it was not operational after December 2022?

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1 Reply
KrisD15
Expert Alumni

1099-NEC for 2022 work, payed in 2023

Yes, you will need to pay Self-Employment tax, no, you can't include it as personal income. 

Yes, you still materially participated in the business. 

 

Unless you used accrual accounting where income is recognized when earned, you used Cash Accounting (which most people use) and income is recognized when paid. 

It is unfortunate that they paid you in the following year, but that is when you need to claim it. 

 

Paying Self-Employment tax is not much different than when the FICA tax is taken out of a W-2 Employee's paycheck. You do pay both halves as a Self-Employed taxpayer, but you also get a credit for half the Self-Employment tax paid on your federal return.

 

 

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