NONEMPLOYEE COMPENSATION REPORTABLE ON REVIVED FORM 1099-NEC FOR 2020 PAYMENTS
| The Internal Revenue Service has revived Form 1099-NEC to eliminate confusion about complying with new filing deadlines aimed at combatting fraud. Failure to report all non-employee 1099 income on form 1099-NEC for 2020 could land you with many penalties and a non deduction for paid independent contractors making over $600.00 for the year. |  |
The Internal Revenue Service (IRS) released its final version of Form 1099-NEC, Nonemployee Compensation, on December 6, 2019, to be used for reporting current and deferred compensation paid to independent contractors (including corporate directors) for the 2020 tax year. Form 1099-NEC (previously retired in 1982) replaces Box 7 of the pre-2020 Form 1099-MISC for reporting nonemployee compensation and accelerates the due date for reporting nonemployee compensation to the IRS to January 31 (or the Monday after January 31 if this deadline falls on a weekend).
“Nonemployee compensation” generally includes payment of $600 or more in fees, commissions, prizes, and awards for services performed as a nonemployee, and other forms of compensation for services performed for a trade or business by an individual who is not an employee. The deadline for filing Form 1099-NEC for the 2020 tax year with both the IRS and the individual workers is February 1, 2021 (since January 31 is a Sunday). However, the deadline for filing the redesigned Form 1099-MISC is March 1, 2021 (since February 28 is a Sunday).
“Nonemployee compensation” generally includes payment of $600 or more in fees, commissions, prizes, and awards for services performed as a nonemployee, and other forms of compensation for services performed for a trade or business by an individual who is not an employee. The deadline for filing Form 1099-NEC for the 2020 tax year with both the IRS and the individual workers is February 1, 2021 (since January 31 is a Sunday). However, the deadline for filing the redesigned Form 1099-MISC is March 1, 2021 (since February 28 is a Sunday).
McVay Business Services complies all your 1099's for 2020 on the new NEC forms. We securely email your non-employees, mail hard copy and efile to the IRS. W-9 compliance services are also available. All 1099's info must be received in our office by 01/15/2021 for a timely filed report.
