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Clearing the Confusion: 1099-MISC or 1099-NEC?

In a move that will impact business owners and tax professionals across the nation, the IRS has released the 2020 Form 1099-NEC (Non-Employee Compensation). The new form replaces Form 1099-MISC for reporting non-employee compensation (in Box 7), shifting the role of the 1099-MISC for reporting all other types of compensation. You should now use the 1099-MISC for non-box 7 reporting.

The type of payments typically required to be reported on this form include royalties, rent, prizes and awards. You must also file Form 1099-MISC for anyone from whom you withheld federal income tax under the backup withholding rules, regardless of the amount. In some cases, you will need to file both a 1099-NEC and a 1099-MISC for the same individual.

 

2020 Information Returns Due Dates

Form

Recipient

IRS Due Date (Paper Filing)

IRS Due Date (Electronic Filing)

1099-NEC

February 1, 2021

February 1, 2021

February 1, 2021

1099-MISC (No Data in Box 8 or 10)

February 1, 2021

March 1, 2021

March 31, 2021

1099-MISC (With Data in Box 8 or 10)

February 16, 2021

March 1, 2021

March 31, 2021

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