Changes to Forms 1099

consultant

The most significant change to Form 1099 in 2020 is the breakout of NEC from Box 7 of Form 1099-MISC to its own Form 1099-NEC.

NEC still includes payments of $600 or more for services of nonemployees and attorneys, but these types of payments will now be reported in Box 1 of the new 2020 Form 1099-NEC.

Starting with the 2020 forms, an organization should not report NEC on Form 1099-MISC. Payments of $600 or more for rent, prizes and awards, gross proceeds to attorneys, certain medical and health care payments, and royalties over $10 should still be reported on Form 1099-MISC. Note: The 2020 Form 1099-MISC has been modified accordingly to eliminate the input of a dollar amount into Box 7. In addition, many of the other Form 1099 MISC Box numbers have been rearranged.

Deadlines

These changes to the Forms 1099 have corresponding filing deadlines.

The 2020 Form 1099-NEC is due to both recipients and the IRS by February 1, 2021, regardless of whether filing electronically or by paper.

The 2020 Form 1099-MISC is also due to recipients by February 1, 2021; however, these Forms are due to the IRS by March 1, 2021, for paper filing or by March 31, 2021, for electronic filing.

Thresholds

The IRS also modified the threshold for the required electronic filing of most information returns, such as Forms W-2 and 1099.

The threshold remains at 250 or more forms filed for the tax year 2020, but drops to 100 forms in the tax year 2021, and 10 forms in the tax year 2022.