Have you seen the 1099-NEC form? Maybe you saw it and wondered:
- What is the 1099-NEC form for?
- Should I have been filing this all along?
- What about the 1099-MISC?
We are here to shed some light on the changes that this form has brought to the 1099 filing process.
In 2020, the IRS introduced the 1099-NEC form, Nonemployee Compensation (NEC). This form, like the 1099-MISC form, is an information filing required to be filed with recipients and the IRS every year.
1099-NEC vs. 1099-MISC
The 1099-NEC form is used for reporting payments for services provided by persons who are not employees. Prior to the introduction of this form, these payments were reported in Box 7 on the 1099-MISC form.
This does not mean that the 1099-NEC form completely replaces the 1099-MISC form nor that the 1099-MISC form is obsolete. 1099-MISC will still be used to report payments that are not for services such as rent, royalties, and prizes.
When are 1099-NEC forms due?
The 1099-NEC form, like the 1099-MISC, must be provided to the recipient by January 31st each year. You are also required to file the 1099-NEC form with the IRS by January 31st. However, if January 31st falls on the weekend, the due date is extended to the following Monday. For example, January 31, 2021, is a Sunday. That means that the deadline for filing 2020 1099-NEC forms is actually February 1, 2021.
Filing 1099s accurately and completely requires attention to the rules published by the IRS as they do change from time to time. We assist many of our ongoing clients with preparing and filing their 1099s. Read more about the services we offer.