Although both of these forms are called information returns, they serve different functions.

The Form W-2 is used by employers to:

• Report wages, tips and other compensation paid to an employee.
• Report the employee’s income and social security taxes withheld and other information. See General Instructions for Forms W-2 and W-3 for more information.
• Report wage information to the employee, and the Social Security Administration. The Social Security Administration shares the information with the Internal Revenue Service.

A Form 1099-MISC is:

• Used generally to report payments made in the course of a trade or business to a person who is not an employee or to an unincorporated business.
• Required when payments of $10 or more in gross royalties or $600 or more in rents or compensation are made.
• Provided by the payer to the IRS and the person or business that received the payment.