What Is Form 1099-NEC, and Does It Apply to Me?
Form 1099-MISC has been replaced by Form 1099-NEC for reporting nonemployee compensation. This generally applies to compensation (fees, benefits, commissions, etc.) totaling at least $600 paid to self-employed individuals including freelancers and independent contractors.
Any business that makes nonemployee compensation payments totaling $600 or more to at least one individual or withholds federal income tax from a nonemployee’s payment, will now use Form 1099-NEC to report those payments and withholding.
In implementing the new NEC form in 2020 during the pandemic, the IRS allocated resources away from making this a more seamless process with the Combined Federal/State Filing Program to focus on the COVID stimulus and other mitigation programs. This fragmentation caused 1099-NEC reporting to be a logistical nightmare for companies handling this process internally.
Partner with Tab Service to determine your Form 1099-NEC reporting obligations and navigate the filing process.