True. Per the IRS:
If you pay independent contractors, you may have to file Form 1099-NEC, Nonemployee Compensation, to report payments for services performed for your trade or business. File Form 1099-NEC for each person in the course of your business to whom you have paid the following during the year at least $600.
- Services performed by someone who is not your employee; (including parts and materials) (box 1); or
- Payments to an attorney (box 1).
You must also file Form 1099-NEC for each person from whom you have withheld any federal income tax under the backup withholding rules regardless of the amount of the payment.
If the following four conditions are met, you must generally report a payment as NEC.
- You made the payment to someone who is not your employee.
- You made the payment for services in the course of your trade or business (including government agencies and nonprofit organizations).
- You made the payment to an individual, estate, or, in some cases, a corporation.
- You made payments to the payee of at least $600 during the year.
For more information regarding reporting non-employee compensation and exception to reporting refer to the Instructions for Forms 1099-MISC and 1099-NEC
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