IRS Reintroduces Form 1099-NEC for Reporting Nonemployee Compensation
IRS Reintroduces Form 1099-NEC for Reporting Nonemployee Compensation
In recent years, Form 1099-MISC has been used to report payments of $600 or more for services performed in a trade or business by someone who is not an employee. However, beginning with the 2020 tax year, the IRS has reintroduced Form 1099-NEC which will be used to report nonemployee compensation of $600 or more, including payments to independent contractors and attorneys. Although Form 1099-MISC will still be used for various other purposes, most businesses will need to file Form 1099-NEC in subsequent years since nonemployee compensation is one of the most common uses of Form 1099.
For the 2020 tax year, Forms 1099-MISC and 1099-NEC must both be furnished to recipients by February 1, 2021. While businesses that file Forms 1099-MISC must furnish them to the IRS by March 1, 2021 (March 31st if electronically filing), Forms 1099-NEC must be furnished to the IRS by the February 1, 2021 due date. If you have any questions regarding whether your business is required to file Forms 1099-MISC or 1099-NEC and are in need of assistance, please let us know.