Coming January 2021 for 2020 Tax Year

Coming January 2021 for 2020 Tax Year

The Internal Revenue Service (IRS) just released a draft version of Form 1099-NEC. This form will be used to report non-employee compensation (NEC) beginning with the filing of 2020 information returns. The form was last used by the IRS in 1982. The re-birth of this form will enable the reporting for amounts paid as non-employee compensation to be reported and filed by January 31 deadline versus on the Form 1099-MISC.

The current deadline changes were a result of the PATH Act in 2015 by Congress to help prevent fraud by getting the information sooner. The IRS has not released a draft version of the Form 1099-MISC reflecting the removal of Box 7 at this time. Of course, the complexity of the form has increased since 1982 with additional boxes added, and there is no reference to a dollar amount threshold at this time in the form's instructions.

Click here for more information on this revived form that will be due January 31, 2021 for the 2020 tax year.

Submitted by: Cindy Henline

Source: Internal Revenue Service

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