1099 Tax Information Returns
What is it measuring?
Companies that hire independent contractors issue 1099-MISC or 1099-K information returns to workers to document income. IRS tax data speaks to the number of these returns issued annually. Online platform workers can be identified by the company issuing the return.
What does it tell us?
The 1099 workforce grew 1.9 percent from 2000-2016, with more than half that growth happening between 2013 and 2016 and attributed to online platform work. The growth in online platform work is driven primarily by individuals whose primary incomes derive from standard jobs, and the majority of platform workers derive only small amounts of income from platform work. Online platform work and independent contracting do not appear to be supplanting standard work arrangements, but taxpayers are increasingly likely to supplement income with platform work.
How is it collected?
Information returns are administrative tax data reported by companies to the IRS.
Who collects it?
Internal Revenue Service (IRS)
Considerations
Prior to 2021, 1099-K forms (commonly used by online platforms) were only required for workers earning more than $20,000 annually. Workers earning less per platform are therefore likely excluded from these analyses. In addition, information returns do not account for forms of informal work that are not reported to the IRS (e.g., babysitting, flea-market selling, house cleaning).
How to access this data?
Data are held by the IRS and restricted to the public. As IRS employees, researchers were granted access through agreements under the Intergovernmental Personnel Act.
Reports
Is Gig Work Replacing Traditional Employment? Evidence from Two Decades of Tax Returns; 2019; ; IRS;