IRS Requires Updated 1099-NEC Form for Contractors
This is a quick notice regarding the 1099-MISC form for the 2020 tax year.
Form 1099-NEC to Replace Form 1099-MISC Box 7
Beginning with the 2020 tax year, Form 1099-NEC will replace Form 1099-MISC Box 7 for reporting non-employee compensation, which includes payments to Independent Contractors.
1099-MISC will still be used for attorneys and other income. If you’ve been reporting in Box 3 of 1099-MISC, you will still use 1099-MISC.
How this Affects the Reporting Process for 2020
If you are printing your own forms, ensure that you are ordering the correct ones.
What does this mean for Vantaca users? No action is needed—we’re prepared for the 2020 tax season. Anything in Vantaca’s system that is set to report under box 7 in 1099-MISC is automatically initialized to send via the new 1099-NEC form.
1099 Deadline Reminders
From the IRS website, the deadline for both 1099-MISC and 1099-NEC are due to taxpayers by February 1, 2021. Automatic extensions are not available, so be sure to have these completed on time.