If you are the employer, you report all compensation for services performed, including the sign-on bonus, on the W-2. The bonus is also subject to regular income tax withholding as well as social security and medicare tax withholding. In other words, if the sign on bonus is $10,000, the employee should get that as a regular pay check with tax withheld, so the take-home amount will be $6000-$7000 depending on the various tax rates. If you want the employee to get a "net" of $10,000, you will have to gross-up the bonus to around $14,000. The gross bonus amount and all the taxes get included in the W-2 at the end of the year.
If you are the employee, and the employer issues a 1099-NEC instead of including the bonus in your W-2 wages, that is an indication they are trying to make you pay both halves of social security and medicare. There is a way to fix this on your tax return but it may result in the company being investigated by the IRS for improperly reporting employee taxes. So you should check with them and ask them to issue correct paperwork before filing your return, to give them a chance to correct it.
