1099 - Reimbursement

[andreapgn445]

Hello everyone.

A quick question. I'm completing a 1099 NEC, for an independent contractor. Should I include in the Nonemployee compensation, the reimbursements we have made to him? That person has incurred expenses related to the operation of the company, and we have reimbursed them.

[Anonymous_ · Accepted solution]

Depending upon the exact circumstances, you should include all of the compensation you paid to the contractor. The contractor can then deduct any expenses the contractor incurred on the contractor's own income tax return.

[JamesG1]

IRS Instructions for Forms 1099-MISC and 1099-NEC page 4 states:

Employee business expense reimbursements

Do not use Form 1099-MISC to report employee business expense reimbursements. Report payments made to employees under a nonaccountable plan as wages on Form W-2. Generally, payments made to employees under an accountable plan are not reportable on Form W-2, except in certain cases when you pay a per diem or mileage allowance.

Are these reimbursements being made under an accountable plan or a nonaccountable plan?