There’s no time like the present to prepare for the 2020 tax filing season. A great place to start is to become familiar with the new IRS form for reporting non-employee compensation.
Beginning with tax year 2020, businesses are to use Form 1099-NEC to report any payment(s) totaling $600 or more to a payee. For reporting non-employee compensation, this form replaces Form 1099-Misc.
Non-employee compensation reported on the 1099-NEC will be noted in Box 1 as opposed to Box 7 on the 1099-Misc.
A sample of the form and instructions can be found at https://www.irs.gov/forms-pubs/about-form-1099-nec.
Due to January 31, 2021 being a Sunday, businesses must file Form 1099-NEC no later than Monday, February 1, 2021.