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Move Over 1099-MISC: The New 1099-NEC Is Here!

As you likely know by now, there has been a major change that will impact your customers’ filings for the 2020 tax year and beyond. The IRS has recently released the1099-NEC, a new form replacing Form 1099-MISC box 7 for reporting nonemployee compensation.

Breaking Down the 1099-NEC

The new 1099-NEC is based on an old form that has been out of use since 1982. The IRS revived the form to address some time-management and administrative issues that arose under the Protecting Americans from the Tax Hikes Act of 2015 (PATH Act). The new Form 1099-NEC effectively separates certain data from box 7 of the 1099-MISC, in addition to staggering the filing due dates.

Written by TaxConnections Admin | Posted in Form 1099-NEC

The IRS has made a major change that could affect your information returns reporting for the upcoming season. Form 1099-NEC is taking the place of what used to be recorded in box 7 of Form 1099-MISC. Typically, this form is issued to contractors, janitorial services, third-party accounts and any other worker paid for services who is not on the payroll. Following are key points about this new form.

The 1099-NEC must be used for the 2020 tax year and beyond. In other words, your independent contractors will now receive Form1099-NEC.
NEC stands for Nonemployee Compensation. The new 1099-NEC is based on an old form that has been out of use since 1982. The IRS revived the form to address some time-management and administrative issues that arose under the Protecting Americans from Tax Hikes Act of 2015 (PATH Act). The new Form 1099-NEC effectively separates certain data from Box 7 of the 1099-MISC, in addition to staggering the filing due dates.
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