Are You Ready for the Switch to Form 1099-NEC?
Starting with the 2021 tax season, businesses started submitting Form 1099-NEC for independent contractors and to the IRS. The IRS started phasing in this requirement for businesses to submit 1099-MISC before 2020. But starting with 2020, businesses are required to submit the 1099-NEC to the IRS. This blog discusses the effect of the new tax law on small businesses and how to avoid the new tax law penalties. Why did you switch to 1099-NEC? With the passing of the PATH Act in 2015, Congress necessitated the reinstatement of the 1099-NEC. But due to various issues with the form’s implementation, its …