Beginning with the tax year 2020, a 1099-NEC must be used to report nonemployee compensation. Prior to 2020, this information had been reported in box 7 on a 1099-Misc.

Payments should be reported as nonemployee compensation if:

  1. Payments were at least $600 in the year
  2. Payment was made to someone who is not your employee
  3. Payment was for services provided during the course of your trade or business
  4. Payment was made to an individual, partnership, or estate

Some examples of vendors who may receive a 1099-NEC would be snow removal, lawn care, repair and maintenance, and professional services such as attorneys and accountants.

1099-NEC’s need to be provided to the payee and filed with the Internal Revenue Service (IRS) by January 31 or, if this lands on a weekend, the following Monday.

If you have questions or need assistance with filing your 1099s, please contact us.

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Rebecca Doyle
I am a Certified Payroll Professional (CPP) and Advanced Certified QuickBooks ProAdvisor, providing payroll and accounting services to businesses. I joined the Hawkins Ash CPAs Green Bay, WI, office in 2003.

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