Which Form Goes Where: NEC vs MISC

The 1099-NEC is for payments of $600 or more for services performed by non-employees. Freelance work, contract labor, consulting fees, attorney fees for legal services — all 1099-NEC. One box, one number, done.

The 1099-MISC covers everything else that requires reporting: rent payments over $600 (to non-corporate landlords), royalties over $10, prizes, medical payments, and certain attorney payments related to settlements rather than services. If you’re an LA production company paying a location fee to a building owner, that’s a 1099-MISC. If you’re paying the editor who cut your film, that’s a 1099-NEC.

California’s FTB Filing Requirements

Here’s where it gets specific. California requires businesses to file 1099 information returns with the Franchise Tax Board (FTB), not just the IRS. The easiest way to handle this is through the Combined Federal/State Filing Program (CF/SF). If your e-filing provider participates in CF/SF, the FTB gets your 1099 data automatically when you file with the IRS.

If you paper-file or your provider isn’t part of CF/SF, you need to submit copies to the FTB directly. The FTB’s address for information returns is in Sacramento, and the deadlines mirror the federal ones — January 31 for the NEC, February 28 (paper) or March 31 (e-file) for the MISC.

California also has a backup withholding requirement. If a payee doesn’t provide a valid taxpayer identification number (TIN) and you pay them $1,500 or more, California requires you to withhold 7% and remit it to the FTB using Form 592. This is separate from the federal backup withholding rate of 24%. The state rate is lower, but it’s an additional obligation that many LA businesses don’t know about.

The Entertainment Industry Angle

LA’s entertainment economy creates 1099 situations that don’t come up in most cities. A production company might pay dozens of contractors on a single project — camera operators, makeup artists, set designers, drivers. Each one who receives $600 or more gets a 1099-NEC. The volume alone makes it easy to miss someone.

Loan-out corporations complicate things further. A lot of actors and directors in LA work through personal loan-out corps (usually S-corps). Payments to a corporation don’t normally require a 1099, but payments for legal services and medical/health care payments still do regardless of entity type. If your production paid an attorney’s loan-out corp, you still issue the 1099.

We handle business tax returns for production companies, talent management firms, and agencies across LA. The 1099 volume is part of the job.

Common Mistakes in Los Angeles

The most frequent error we see: assuming that paying through a platform means you don’t owe a 1099. If you Venmo a contractor $3,000 for a project, you still issue a 1099-NEC. The platform might send a 1099-K to the contractor above certain thresholds, but that’s the platform’s obligation — not yours. Your obligation to file a 1099-NEC stands regardless.

Another one: misclassifying workers. California’s AB5 law sets a strict ABC test for whether someone is an employee or an independent contractor. If you’re issuing 1099s to people who should be on payroll under AB5, the 1099 won’t protect you from an EDD audit. The classification question and the reporting question are separate, but they’re related — and both carry penalties under 26 U.S.C. § 6721.

Key Deadlines for LA Businesses

• 1099-NEC: January 31 to recipients and the IRS. No extension available.
• 1099-MISC: January 31 to recipients. February 28 (paper) or March 31 (e-file) to the IRS.
• California FTB: Same deadlines. Use CF/SF for automatic state filing, or mail copies to the FTB separately.
• Form 592 (backup withholding): Due with your quarterly or annual withholding return to the FTB.

Sources

• IRS — About Form 1099-NEC
• IRS — About Form 1099-MISC
• IRS — About Form 1099-K
• 26 U.S.C. § 6721 — Failure to File Correct Information Returns
• IRS — Instructions for Forms 1099-MISC and 1099-NEC
• CA FTB — Business Filing Requirements
• CA FTB — Form 592, Resident and Nonresident Withholding