Contract labor includes payments to persons you do not treat as employees for services performed for your trade or business. You must file Form 1099-NEC to report contract labor payments of $600 or
more during the year.
https://www.irs.gov/forms-pubs/about-form-1099-nec
This expense is tax deductible on your Schedule C, Contract Labor.
If you pay them as employees, and withhold taxes, and submit payroll taxes, then you would provide them with Form W2.
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