The IRS has made the DRAFT 1099 NEC for Non-employee Compensation tax form available as of July 24th, 2019. The purpose of the 1099-NEC is to extract Box 7 Nonemployee Compensation from the 1099-MISC and place it on a separate tax form.
The purpose of the 1099 NEC Tax Form is to extract Box 7 Nonemployee Compensation from the 1099-MISC and place it on a separate tax form. The IRS argues that it has been difficult for many firms to comply with distinct reporting dates for NEC and non-NEC amounts on Form 1099-MISC. In order to resolve this issue, the government has brought back Document 1099-NEC, a tax form that was previously deactivated.
Click here: https://www.irs.gov/pub/irs-dft/f1099nec–dft.pdf
What Time Does the New 1099-NEC Form Go Into Effect?
The 1099-NEC is anticipated to go into effect in the 2020 tax year (which is reported in Calendar Year 2021). The 1099-NEC is still simply a draught form, and the IRS has the right to make changes.
The IRS’s draught 1099-NEC instructions are still not available to the general public.
Possible Consequences of the 1099-NEC Form
The IRS 1099-NEC form could have a wide range of effects. There will be a lot of adjustments and consequences if the 1099-NEC is implemented.
The following are a couple of instances of the likely results:
Changes to the 1099-MISC tax form would require the removal of the Box 9 checkbox and the 1099-MISC Box 7 amount for nonemployee remuneration.
Tracking payments – Businesses will need to keep track of nonemployee compensation payments separately from other 1099-MISC payments (if previously being tracked together).
State Income and State Withholding: It is the business’s responsibility to determine the portion of state income and state withholding that is attributable to nonemployee compensation (instead of across all payment boxes on the 1099-MISC).
State Direct Reporting: Each state must examine the new tax form and publish its own specifications for state direct reporting. With any luck, the new form will be incorporated into the IRS’s Combined Federal/State Filing Program, which will lessen the burden of reporting on companies. That has yet to be determined, though.
Support for the 1099-NEC on eFileMyForms
EFileMyForms will offer complete support for the 1099-NEC Form. The 1099-NEC can be manually entered, imported, and then submitted for printing, mailing, and/or electronic filing just like any other form.
Additionally, for any IRS developments, keep checking our blog and get in touch with Form1099Online at +1-316-869-0948 or firstname.lastname@example.org