New Form 1099-NEC
By Peter O. McDonald, CPA, Member of the Firm
The IRS has re-introduced Form 1099-NEC for reporting of non-employee compensation. For tax years 2020 and forward, payments of $600 or more to individuals and unincorporated businesses for services treated as non-employee compensation must be reported to the IRS on Form 1099-NEC. In prior years, non-employee compensation was reported on Form 1099-MISC, Box 7.
The IRS moved the reporting of non-employee compensation to Form 1099-NEC to separate the reporting from the remaining payments reported on 1099-MISC. This change provides taxpayers with more time to prepare and file Form 1099-MISC by the annual February 28 deadline (or March 31 deadline if filing electronically), while still meeting the annual January 31 reporting deadline for non-employee compensation by filing Form 1099-NEC.
With the exception of changes to Box 7, Form 1099-MISC largely remains unchanged. Payments for royalties, rents, prizes and awards, other income, medical and health care payments, and payments to attorneys are still reported on Form 1099-MISC.