Everything You Need To Know About Form 1099-NEC

January 07, 2021
Everything You Need To Know About Form 1099-NEC

Form 1099-NEC has been reintroduced by the IRS (Internal Revenue Service) as the new way to report self-employment income in place of Form 1099-MISC which has been used traditionally. This has been conducted to help clarify the separate filing deadlines on Form 1099-MISC & the new 1099-NEC form will be employed starting with the 2020 tax year.

Who makes use of Form 1099-NEC?

All businesses need to file a Form 1099-NEC form for non employee compensation if each of these below listed conditioned are fulfilled:

  • It’s made to someone who’s not your worker
  • It’s made for services in the course of your trade
  • It was made to an individual, partnership or corporation
  • The payments given to the beneficiary were a minimum of $600 or more for the year.

 

Some examples of what is reported on 1099-NEC include:

  • Fees
  • Commissions
  • Prizes
  • Awards
  • Other forms of compensation for services

 

You also need to file Form 1099-NEC for anyone from whom you withdrawn federal income tax under backup withholding guidelines for any sum, even if it is less than $600.

From where I can obtain a Form 1099-NEC?

Simply visit the IRS website and download a copy of Form 1099-NEC. As of September 2020 it was feasible to order paper copies of Form 1099-NEC. However, in present the National Distribution Center is closed & can’t take order for forms or publications until further notice.

What to do in the event you don’t receive Form 1099-NEC?

If you are a nonemployee and have not received your Form 1099-NEC yet, get in touch with the corporation directly to request it. It is very important to get it promptly as you are going to need it for your personal taxes.

What to include on Form 1099-NEC?

At the time of filling out Form 1099-NEC, you need to include the below listed info:

  • Your name, address, and phone number
  • Your TIN (Taxpayer Identification Number)
  • Recipient’s name, address, and TIN
  • Total nonemployee compensation
  • Federal & state income tax withheld (if applicable)

 

Can I e-file Form 1099-NEC?

Yes you can e-file Form 1099-NEC electronically with the IRS.

How to file Form 1099-NEC?

Employers not only need to keep the 1099-NEC on their radars, but they also have to tick their calendars for a new nonemployee compensation due date.

The forms need to be filled with the IRS prior to 31st January employing either paper or electronic filing. You will need to make use of the IRS Fire system if you file electronically.