The 1099-NEC form is used by businesses to report payments made to non-employees, such as independent contractors and freelancers. It is specifically designed for reporting payments of $600 or more for services rendered during the tax year. This form helps the Internal Revenue Service (IRS) track income that may not be reported on traditional payroll forms. Introduced in 2020, the 1099-NEC replaced the non-employee compensation section of the 1099-MISC form. Businesses must provide a copy of the form to both the recipient and the IRS by specific deadlines, ensuring compliance with tax regulations and accurate reporting of income.