IRS Introduces the New Form 1099-NEC
The IRS has introduced a new Form 1099-NEC, Nonemployee Compensation. It's a sibling to Form 1099-MISC and replaces it for certain purposes. You must file it for each person in the course of your business to whom you have paid at least $600 during the year for the following:
The IRS has provided additional guidance about what exactly is nonemployee compensation. If the situation meets all four of the following cases, it's an NEC situation:
A partial list of payments that belong on a Form 1099-NEC includes the following:
This is not a complete list, and the choice between the NEC and MISC forms can be confusing. Be sure to keep clear, comprehensive records so your tax professional can help you decide how various payments should be reported. Form 1099-NEC is due on Jan. 31 or the next business day if that date falls on a weekend or holiday.
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