• 1099-NEC replaces 1099-MISC for independent contractors
  • The deadline is February 1, 2021
  • Instructions can be found here (Click)
  • More information about why the IRS made the change can be found at Forbes.

1099-NEC Replaces 1099-MISC

Beginning in the tax year 2020, the IRS requires current and deferred non-employee compensation payments to be reported using Form 1099-NEC. The Form 1099-NEC replaces the Form 1099-MISC for non-employee compensation payments and generally must be filed with the IRS by the following January 31. However, in the tax year 2020, the filing deadline for the Form 1099-NEC is February 1, 2021, the first business day after January 31, 2021.

Examples of nonemployee compensation to report on the Form 1099-NEC include payments of at least $600 during the year:

To independent contractors
  • For professional services, such as attorneys
  • For commissions paid to nonemployee salespersons
  • For services rendered in the course of trade or business by someone who is not your employee
  • Generally, payments to a corporation do not have to be reported on Form 1099-NEC, except for payments for attorneys' fees, fish purchases, or payments by a federal executive agency for services.

The Form 1099-MISC still will be used to report other business payments, such as commercial rent payments, payments to attorneys other than for their services (e.g., in a settlement agreement), and other income (such as prizes and awards). The Form 1099-MISC has a later due date than the Form 1099-NEC and is due by March 1, 2021 (paper filing) or March 31, 2020 (electronic filing).