The PATH Act accelerated the due date for filing Form 1099 that includes nonemployee compensation (NEC) from February 28 to January 31 and eliminated the automatic 30-day extension for forms that include NEC. Starting with tax year 2020, taxpayers should use Form 1099-NEC to report nonemployee compensation.

Form 1099-NEC replaces the use of box 7 on Form 1099-MISC from previous years. Other uses of 1099-MISC have not changed and will continue to be used for common payments such as rent and payments to an attorney.

Businesses will need to use Form 1099-NEC if they made payments totaling $600 or more to a nonemployee, such as an independent contractor.

If you are a self-employed individual, you should receive a separate 1099-NEC from each business you earned $600 or more from in 2020. You should receive your form by Jan. 31 each year since it is also the due date for businesses to submit the form to the IRS.

The switch of reporting nonemployee compensation from Form 1099-MISC to Form 1099-NEC was made to clarify the separate filing deadlines when reporting different types of payments that were being reported on Form 1099-MISC.

For additional information regarding Form 1099-NEC, please contact your Zinner representative.