Changes to FORM 1099-MISC and New FORM 1099-NEC
Last used in 1982, and to alleviate confusion caused by the PATH Act, the IRS has reinstated Form 1099-NEC which will be used to report Nonemployee Compensation (NEC) for tax year 2020. The new 1099-NEC is used to report any payment of $600 or more to payees which was previously reported in Box 7 on Form 1099-MISC.
While the 1099-NEC remains largely unchanged, the new form 1099-NEC will only be used for reporting NEC. Additionally, the 1099-NEC includes checkbox’s to indicate 1) if the payer is reporting payments subject to FATCA (Foreign Account Tax Compliance ACT) and 2) if you were notified by the IRS twice within 3 calendar years that the payee provided an incorrect TIN (2nd TIN Not).
The new filing deadline for 1099-NEC is January 31 and the IRS has eliminated the automatic 30-day extension for forms that include NEC.
For official general instructions for Forms 1099-MISC and 1099-NEC, visit: https://www.irs.gov/pub/irs-pdf/i1099msc.pdf
Before engaging in business with new vendors, ask them to complete form W-9 which can be found on the IRS website at https://www.irs.gov/pub/irs-pdf/fw9.pdf.
If you have questions about your Form 1099 requirements, please contact us anytime for more information and assistance.
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