IRS Launches New Form 1099-NEC

For years, businesses used Form 1099-MISC to report calendar-year payments exceeding $600 to individuals who performed business services. These include vendors, independent contractors, freelancers, and consultants.

The new Form 1099-NEC will be used to report all payments made to non-employee service providers, while Form 1099-MISC will narrow in scope, retaining its focus on royalties, health care payments, and other business-related payments not made directly to an individual. The other traditional uses of the 1099-MISC are still in effect. When filing electronically, the deadline is January 31 for Form 1099-NEC and March 31 for Form 1099-MISC.

Companies can make things easier by requesting new W-9s from their service providers. Fresh W-9s are a good way to avoid incorrect filings, and the process of requesting them gives companies a chance to identify who needs a 1099-NEC.

Questions? Contact one of our tax experts at (888) 388-1040.