Wiki source code of 1099-NEC

Version 3.1 by jackb on 2023/10/31 21:39
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1 ====== **IMPORTANT 1099 INFO** - Starting in 2020, the IRS has removed Box 7, Nonemployee Compensation, from the 1099-MISC and moved it to form 1099-NEC. ======
2
3 == **1099-NEC vs. 1099-MISC FAQs** ==
4
5 ====== **Q:** Can I process 1099-MISC & 1099-NEC Recipients all together at once?
6 **A:** No. Within Aatrix, each 1099 filing has to be processed separately with the required recipients and a separate 1096. ======
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8 ====== **Q:** What if 1099-NEC is not available to select in my Accounting/Payroll Software?
9 **A:** You will want to verify that Aatrix is up to date. Start by opening your history or existing reports option and taking the **Automatic Update** if prompted. After you have completed the update, recheck your forms list to see if the 1099-NEC is available. If the report is still unavailable, please contact your Accounting/Payroll Software support for assistance. The Accounting/Payroll Software may need to be updated before processing the new 1099-NEC. ======
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11 ====== **Q:** Why are 1099-NEC Recipients showing up in the 1099-MISC process?
12 **A:** Most Accounting/Payroll Software have configurations that indicate the type of 1099 a Vendor/Recipient should receive. If you have questions about adjusting the Vendor/Recipient configuration, please contact your Accounting/Payroll Software support for assistance. In the event of a time constraint, the alternative solution would be to remove the Recipient's row from the preparer. ======
13
14 == **The 2020 Form 1099-NEC** ==
15
16 ====== After a 38-year absence, **Form 1099-NEC** is making a return in the **2020** tax year. Employers will use a revamped form and say goodbye to reporting Nonemployee Compensation **(Box 7) on Form 1099-MISC**. ======
17
18 ====== **Overview of Form 1099-MISC** ======
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20 ====== **Before 2020**, you would include Nonemployee Compensation in Box 7 on Form 1099-MISC. **In 2020**, Box 7 on Form 1099-MISC will turn into "Payer made direct sales totaling $5,000 or more of consumer products to recipient for resale” and Nonemployee Compensation will be reported on Form 1099-NEC. ======
21
22 ====== **What is Form 1099-NEC?** ======
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24 Form 1099-NEC is a form that reports Nonemployee Compensation and any Federal tax withheld. Form 1099-NEC is only replacing the use of Form 1099-MISC box 7.
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26 Form 1099-NEC is not new; it was last used in 1982. The IRS is reviving the form in 2020 in response to the Protecting Americans from Tax Hikes Act (PATH Act).
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28 Before the PATH Act, taxpayers could use Form 1099-MISC to report Nonemployee Compensation and miscellaneous income items by February 28 each year. In 2015, however, the PATH Act changed the Form 1099-MISC due date to January 31 for reporting Nonemployee Compensation.
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30 This change confused employers and taxpayers and caused the IRS to mistakenly treat forms received after the January 31 deadline as late returns.
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32 The IRS has brought back Form 1099-NEC to separate nonemployee expenses and clear up this confusion.
33
34 == **What do you report on Form 1099-NEC?** ==
35
36 ====== Use Form 1099-NEC to report nonemployee compensation. Nonemployee compensation includes the following payment types to independent contractors: ======
37
38 * (((
39 ====== Fees ======
40 )))
41 * (((
42 ====== Commissions ======
43 )))
44 * (((
45 ====== Prizes ======
46 )))
47 * (((
48 ====== Awards ======
49 )))
50 * (((
51 ====== Other forms of compensation for services ======
52 )))
53
54 == **Where do you send Form 1099-NEC?** ==
55
56 ====== Like Form 1099-MISC, there are multiple copies of Form 1099-NEC you must distribute. ======
57
58 ====== Check out each copy and its recipient below: ======
59
60 * (((
61 ====== **Copy A** to the IRS ======
62 )))
63 * (((
64 ====== **Copy 1** to the State tax department if necessary ======
65 )))
66 * (((
67 ====== **Copy 2** and B are for the recipient ======
68 )))
69 * (((
70 ====== **Copy C** is for the payer's records ======
71 )))
72
73 ====== The 1099-NEC can be electronically filed using the **IRS FIRE** system or mailed directly to the IRS. ======
74
75 == **What do you include on Form 1099-NEC?** ==
76
77 ====== As a reminder, newly hired independent contractors must fill out Form W-9. Then, use Form W-9 to report Nonemployee Compensation at the end of the year. ======
78
79 ====== When filling out Form 1099-NEC, include the following information: ======
80
81 * (((
82 ====== Business’s name, address, and phone number ======
83 )))
84 * (((
85 ====== Business’s TIN ======
86 )))
87 * (((
88 ====== Recipient’s name, address, and TIN ======
89 )))
90 * (((
91 ====== Total Nonemployee Compensation ======
92 )))
93 * (((
94 ====== Federal and state income tax withheld ======
95 )))
96
97 ====== For more information on how to fill out the form, use the IRS’s website and the 1099-NEC instructions. ======
98
99 == **What is the due date for Form 1099-NEC?** ==
100
101 ====== The IRS, and the recipient copy, will need to be filed by the end of January. ======
102
103 ----
104
105 == Related Pages: ==
106
107
108 === [[W-2 eFiling Process>>doc:Windows.U\.S\..Year-end, W-210951099 Questions ». Processing and Form Introduction.W-2 eFiling Process .WebHome]] ===
109
110 Learn more about the W-2 e-Filing Process with the Aatrix W-2 Preparer.
111
112
113 === [[Importing a CSV File>>url:https://www.aatrix.com/support/knowledgebase/windows/us/year-end/form-intro/importing-csv-file/]] (Not Sure) ===
114
115 Learn about importing a CSV into the ACA Preparer.
116
117
118 === [[Amount Due on State Reconciliation Returns>>doc:Windows.U\.S\..Year-end, W-210951099 Questions ». Processing and Form Introduction.Amount Due on State Reconciliation Returns.WebHome]] ===
119
120 Learn about amounts due during the W-2 and 1099 process on state reconciliation returns.
121
122
123 === [[eFile or Print Incomplete>>doc:Windows.U\.S\..Year-end, W-210951099 Questions ». Processing and Form Introduction.eFile or Print Incomplete.WebHome]] ===
124
125 Learn how to eFile or Print additional forms.
126
127
128 === [[1099 eFiling Process>>doc:Windows.U\.S\..Year-end, W-210951099 Questions ». Processing and Form Introduction.1099 eFiling Process.WebHome]] ===
129
130 Learn more about the 1099 e-Filing Process with the Aatrix 1099 Preparer.