Get answers to frequently asked questions about processing the new 1099-NEC tax forms and how to stay in compliance with IRS regulations for reporting none-employee compensation.
Form 1099 NEC is a new federal tax form that payers must file with the Internal Revenue Service to report payments paid to none-employees such as contractors, vendors, consultants and the self-employed. The formal name of the Form 1099-NEC is “Nonemployee Compensation.”
Here’s what the form does:
If you are preparing your forms using our 1099 NEC software, you provide the payer, recipient and money information and the software will generate the different form copies. You should be able to electronically file your 1099-NEC forms with the IRS and print copies for recipients and your records. If you prefer to fill out the 1099-NEC returns yourself, you can order the official IRS forms, which include a scannable Copy A for filing with the government and all other applicable copies of the form, visit our buy page. If you want to get the forms directly from the IRS, you can do so by visiting www.IRS.gov/orderforms.
According to the IRS, organizations must file form 1099-NEC for each person who is not classified as an employee to whom they have paid at least $600 for services performed. This also includes payments to a law firm or fish purchases.
For tax year 2020, organizations must send Copy B of form 1099-NEC to the recipient by February 1, 2021 and file Copy A of the form with the IRS by February 1, 2021.These dates apply for both paper and electronic filing.
The threshold for filing “Nonemployee Compensation” forms is $600. So, if the payment is less than this threshold then it does not need to be reported to the IRS.
Prior to the 2020 tax year, when you filed your 1099-MISC tax return with the IRS, box 7 was a money field used to report “Nonemployee compensation”, but now if you look at the form you can see that box 7 is a check box for indicating if the payer made direct sales of $5,000 or more of consumer products to a buyer (recipient) for resale. In order to report compensation paid to none-employees you need to use box 1 on the new form 1099-NEC.
Follow these steps inside W2 Mate to print 1099-NEC forms:
Copy A of Form 1099-NEC must be in red OCR dropout ink or an exact match. However, the four-digit form identifying number must be in nonreflective carbon-based black ink in OCR A font. See image below:
IRS Publication 1220 defines the format for creating 1099-NEC E-File submissions for upload to the IRS. Below is a summary of the steps:
Filers of form 1099-NEC may request an extension request on paper Form 8809 (Application for Extension of Time to File Information Returns). To file for an extension, one of the following criteria must be met:
If your principal business, office or agency, or legal residence in the case of an individual, is located in | Use the following address |
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Alabama, Arizona, Arkansas, Delaware, Florida, Georgia, Kentucky, Maine, Massachusetts, Mississippi, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Ohio, Texas, Vermont, Virginia | Internal Revenue Service Austin Submission Processing Center P.O. Box 149213 Austin, TX 78741 |
Alaska, Colorado, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Montana, Nebraska, Nevada, North Dakota, Oklahoma, Oregon, South Carolina, South Dakota, Tennessee, Utah, Washington, Wisconsin, Wyoming | Internal Revenue Service Center P.O. Box 219256 Kansas City, MO 64121-9256 |
California, Connecticut, District of Columbia, Louisiana, Maryland, Pennsylvania, Rhode Island, West Virginia | Department of the Treasury Internal Revenue Service Center Ogden, UT 84201 |
Outside the United States | Internal Revenue Service, Austin Submission Processing Center, P.O. Box 149213, Austin, TX 78741 |
Older versions of QuickBooks (2017, 2016, 2015 and before) will not support 1099-NEC filing. In this case you can use our W2 Mate software to import 1099 amounts from QuickBooks and then prepare your 1099-NEC forms. If you do not want to import your data, you can type inside W2 Mate and then print. Newer versions of QuickBooks (2018, 2019, 2020 and above), will support 1099-NEC. For these versions you can also use our W2 Mate, to import your data and then print, PDF and e-File. You can also e-File with the state if you are required to do that.
Please visit the 1099-NEC vs 1099-MISC page which compares the two forms side-by-side, including what amounts to report, deadline, mailing address and what software to use for printing / e-filing.
The following states do not require 1099-NEC filing:
The following states do require 1099-NEC filing, however some of them do not need the forms sent unless state income tax is withheld (you will need to check directly with the state in that case):
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