The 1099-NEC Form Replaces the 1099-MISC Form for Independent Contractor Payments

Share this article
Share on linkedin
Share on twitter
Share on facebook
Summary:
  • 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).

Share this article
Share on linkedin
Share on twitter
Share on facebook
Related
Blog
Sign up for new articles from the DXA Group

Never miss an insight. We'll email you when new articles are published.