Form 1099 NEC Online Fillable Copies: Have you paid an independent contractor in 2020 tax year? Then you need to report the non-employee compensations paid to the independent contractor in 1099 NEC Form. 1099 NEC is filed by the tax payers when they pay an independent contractor about $600 annually. The payments made with the independent contractor are on purpose of business or trade. Personal payments are not reported in NEC Tax Form.
If you’re an independent contractor or working with an independent contractor, here’s the information you need to know. We’ll provide you instructions about 1099 NEC Form copies, when you receive 1099 NEC Copy, who provides 1099 NEC Copies, conditions to file 1099 NEC copy, how many copies of 1099 NEC Form 2020 are issued, when to file 1099 NEC copies online.
What are the 1099 NEC Tax Form 2020 copies?
The IRS introduced the new 1099 NEC Form for reporting independent contractor income. The payments made are not on payroll but as contract basis to complete the work. The tax payer need to issue four copies when filing the non-employee compensations:
- Copy A to the IRS: 1099 NEC Copy A is submitted to the IRS within the due date. The IRS identifies the payments made on purpose of business or not. Through 1099 NEC Copy A, the IRS can control fraudulent credit claims and unexpected penalties.
- Copy B to the contractor: 1099 NEC Copy B is submitted to the independent contractor before the deadline. The independent contractor includes the payments received when filing the information return form.
- Copy 1 to the state tax department: If you’re withholding any state tax under backup withholding rules, then you need to send the copy of 1099 NEC Form to the recipient state. As the 1099 NEC Form is newly introduced, every state is not allowed to file 1099 NEC. Only few of the states are included in combined federal and state filing program. Before filing, check whether you’re state is required to file 1099 NEC or not. Then you need to include the recipient’s state information i.e. state name, state identification number, state tax amount in the Form.
- Copy C to the payer: 1099 NEC Copy C is kept with the payer itself. It is stored in records as the proof of payments made in a tax year.
When you receive Form 1099 NEC Copy?
If you’re an independent contractor, you’ll receive 1099 NEC Form when:
- Work on purpose of business or trade: If you’re classified as an independent contractor, you receive a 1099 NEC Tax Form for payments received on purpose of business or trade.
- Amount paid exceeds $600: The payments made with you are more than $600 you’ll receive a 1099 NEC Form on purpose of business or trade.
- Withheld federal income tax: If you are an independent contractor, then you’re required to provide a valid TIN to the payer of the 1099 NEC Form. Form 1099 online NEC Form falls under backup withholding tax for the invalid TIN or details provided in the Form. In such cases, the recipient may receive the Form.
Who provides 1099 NEC copies?
1099 NEC Copy is sent by the Tax payer who made the payments to the individual person on purpose of business or trade.
For example: If you hire an independent contractor and paid $600, then it’s your responsibility to report the payments to the IRS and send a copy of 1099 NEC Form to the contractor.
Conditions to file 1099 NEC copy
1099 NEC filing conditions:
- Independent contractor: 1099 NEC Form is filed with an individual person or independent contractor or self employed individual or sole proprietors etc.
- File the 1099 NEC form when the payments made are $600 or more.
- The services performed are in the course of the business or trade.
- If the payments made are with individual, estate or partnership.
How many 1099 NEC copies are issued?
The tax payer is required to issue 5 copies of 1099 NEC Form. This includes:
Copy A: To the IRS.
Copy 1: To the State Tax Department.
Copy B: To the Recipient.
Copy 2: To Recipient’s State if necessary.
Copy C: To the Tax Payer.
When to file 1099 NEC copies online?
The tax payer is required to file the 1099 NEC Form by the end of January 31st electronically to the IRS and to the recipient. As the due in 2020 tax year falls on a Sunday, you’re required to file the 1099 NEC Form by February 1st, 2021.
Note: File your 1099 NEC Form with the IRS and also to the recipients before the deadline to avoid penalties. The IRS imposes heavy penalties if you file your Form late. As long as you delay to file the form, the penalty amount also increases day by day.
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