2020 1099-NEC Form For Reporting Non-Employee Payments: 2020 1099- NEC Form is used for reporting non-employee payments of $600 or more in the course of your trade or business. Still, filer needs to use the 1099-Misc Form for reporting payments such as royalties, rents, and health care payments.
For reporting non-employee payments, IRS reintroduces the 1099-NEC Tax Form for the 2020 tax year. Now, the government is bringing back the 1099-NEC Form for reporting non-employee compensation. The form was last used in 1982.
New IRS 1099-NEC Form for 2020 Tax Year
Internal Revenue Service reuses 1099-NEC Form for 2020 tax year for reporting Contractor payments. Here, we provide details about the IRS 1099-NEC Form.
Main Purpose of Reintroducing 1099-NEC Form
Generally, the 1099-NEC Box 1 mainly used for reporting non-employee payments. The Printable 1099-NEC Form is being reintroduced to address confusion created by the PATH Act of 2015. Particularly, the PATH Act established different due dates for the different types of payments reported on the IRS 1099-Misc Form. Different due dates leading to undeserved penalty notices for filers. The renewed Fillable 1099-NEC Form separates out non-employee payments from other sections of the Printable 1099-Misc Form. Filers must report their non-employee payments on the 1099-NEC Form also form 1099-NEC prevents confusion of the due date.
Is 1099-NEC Form Replaces 1099-Misc Form?
No, the 1099 non-employee compensation form used for reporting contractor payments of $600 or more in the course of your trade or business. For reporting other miscellaneous payments such as rent, royalties, and health care payments, the filer still needs to use the E-file 1099-Misc Form. Changed 1099-Misc Form Box 7 used for reporting direct sales of $5,000 or more. If filer files electronically, then the deadline for filing the 2020 tax year’s 1099-Misc is March 31st.
Who Should File an IRS 1099-NEC Form?
Any business that pays people for services who are not employees will be affected by this modification. The 1099-NEC Information Return includes payments to consultants like attorneys, architects, and accountants, and non-employee sales commissions. Businesses and payers who pay $600 or more for services under the trade must file an IRS 1099-NEC form with the IRS as well as send it to the payee.
Some Examples of Non-employee Payments
- A small office that recruits a contractor to design and build individual workstations and improve common areas
- A firm that keeps a rideshare service on payment for monthly airport pickups
- A firm that recruits a benefits consultant on a project basis to estimate its HR function
- A business that recruits an outside attorney to defend against a lawsuit
IRS Will Not Forward 1099-NEC Information to States
Businesses should note that the 1099-NEC will not included in the IRS 1099 Combined Federal/State Filing Program. The IRS forwards information from a number of key forms to the appropriate states Under the CF/SF, but will not do so for the Form 1099-NEC. This means that businesses will need to discover a way or vendor to file the Form 1099 Online with the correct states in addition to filing it to the IRS.
Conclusion
2020 1099-NEC Form For Reporting Non-Employee Payments: As a 1099 NEC filer, you must know about the new IRS 1099-NEC Form. Also, filers who want to report non-employee payments must report before the due date with the IRS.
For more information about 1099-NEC Form E-filing and requirements, you can contact our website https://www.printable1099nec.com.