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2.1 | 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. ====== |
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1.1 | 2 | |
| 3 | == **1099-NEC vs. 1099-MISC FAQs** == | ||
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2.1 | 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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2.1 | 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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2.1 | 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. ====== | ||
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1.1 | 13 | |
| 14 | == **The 2020 Form 1099-NEC** == | ||
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2.1 | 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**. ====== |
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1.1 | 17 | |
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2.1 | 18 | ====== **Overview of Form 1099-MISC** ====== |
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2.1 | 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. ====== |
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2.1 | 22 | ====== **What is Form 1099-NEC?** ====== |
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1.1 | 23 | |
| 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?** == | ||
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2.1 | 36 | ====== Use Form 1099-NEC to report nonemployee compensation. Nonemployee compensation includes the following payment types to independent contractors: ====== |
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1.1 | 37 | |
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2.1 | 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 | ))) | ||
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1.1 | 53 | |
| 54 | == **Where do you send Form 1099-NEC?** == | ||
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2.1 | 56 | ====== Like Form 1099-MISC, there are multiple copies of Form 1099-NEC you must distribute. ====== |
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1.1 | 57 | |
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2.1 | 58 | ====== Check out each copy and its recipient below: ====== |
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1.1 | 59 | |
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2.1 | 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 | ))) | ||
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2.1 | 73 | ====== The 1099-NEC can be electronically filed using the **IRS FIRE** system or mailed directly to the IRS. ====== |
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1.1 | 74 | |
| 75 | == **What do you include on Form 1099-NEC?** == | ||
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2.1 | 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. ====== |
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1.1 | 78 | |
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2.1 | 79 | ====== When filling out Form 1099-NEC, include the following information: ====== |
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2.1 | 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 | ))) | ||
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1.1 | 96 | |
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2.1 | 97 | ====== For more information on how to fill out the form, use the IRS’s website and the 1099-NEC instructions. ====== |
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1.1 | 98 | |
| 99 | == **What is the due date for Form 1099-NEC?** == | ||
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2.1 | 101 | ====== The IRS, and the recipient copy, will need to be filed by the end of January. ====== |
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1.1 | 102 | |
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3.1 | 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 | |||
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5.1 | 110 | ====== Learn more about the W-2 e-Filing Process with the Aatrix W-2 Preparer. ====== |
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3.1 | 111 | |
| 112 | |||
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5.1 | 113 | === [[Importing a CSV File>>doc:Windows.U\.S\..Affordable Care Act (ACA) ».Processing and Form Introduction.Importing a CSF File.WebHome]] === |
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3.1 | 114 | |
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5.1 | 115 | ====== Learn about importing a CSV into the ACA Preparer. ====== |
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3.1 | 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]] === | ||
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5.1 | 120 | ====== Learn about amounts due during the W-2 and 1099 process on state reconciliation returns. ====== |
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3.1 | 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 | |||
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5.1 | 125 | ====== Learn how to eFile or Print additional forms. ====== |
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3.1 | 126 | |
| 127 | |||
| 128 | === [[1099 eFiling Process>>doc:Windows.U\.S\..Year-end, W-210951099 Questions ». Processing and Form Introduction.1099 eFiling Process.WebHome]] === | ||
| 129 | |||
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5.1 | 130 | ====== Learn more about the 1099 e-Filing Process with the Aatrix 1099 Preparer. ====== |