{"id":14883,"date":"2020-08-08T14:47:11","date_gmt":"2020-08-08T19:47:11","guid":{"rendered":"https:\/\/sfwpartnersllc.com\/?p=14883"},"modified":"2020-08-08T14:47:11","modified_gmt":"2020-08-08T19:47:11","slug":"businesses-get-ready-for-the-new-form-1099-nec-2","status":"publish","type":"post","link":"https:\/\/www.sfw.cpa\/news-and-guides\/businesses-get-ready-for-the-new-form-1099-nec-2\/","title":{"rendered":"Businesses: Get Ready for the New Form 1099-NEC"},"content":{"rendered":"

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There\u2019s a new IRS form for business taxpayers that pay or receive nonemployee compensation.<\/p>\n

Beginning with tax year 2020, payers must complete Form 1099-NEC, Nonemployee Compensation, to report any payment of $600 or more to a payee.<\/p>\n

Why the new form?<\/strong><\/p>\n

Prior to 2020, Form 1099-MISC was filed to report payments totaling at least $600 in a calendar year for services performed in a trade or business by someone who isn\u2019t treated as an employee. These payments are referred to as nonemployee compensation (NEC) and the payment amount was reported in box 7.<\/p>\n

Form 1099-NEC was reintroduced to alleviate the confusion caused by separate deadlines for Form 1099-MISC that report NEC in box 7 and all other Form 1099-MISC for paper filers and electronic filers. The IRS announced in July 2019 that, for 2020 and thereafter, it will reintroduce the previously retired Form 1099-NEC, which was last used in the 1980s.<\/p>\n

What businesses will file? <\/strong><\/p>\n

Payers of nonemployee compensation will now use Form 1099-NEC to report those payments.<\/p>\n

Generally, payers must file Form 1099-NEC by January\u00a031. For 2020 tax returns, the due date will be February\u00a01, 2021, because January\u00a031, 2021, is on a Sunday. There\u2019s no automatic 30-day extension to file Form 1099-NEC. However, an extension to file may be available under certain hardship conditions.<\/p>\n

Can a business get an extension?<\/strong><\/p>\n

Form 8809 is used to file for an extension for all types of Forms 1099, as well as for other forms. The IRS recently released a draft of Form 8809. The instructions note that there are no automatic extension requests for Form 1099-NEC. Instead, the IRS will grant only one 30-day extension, and only for certain reasons.<\/p>\n

Requests must be submitted on paper. Line 7 lists reasons for requesting an extension. The reasons that an extension to file a Form 1099-NEC (and also a Form W-2, Wage and Tax Statement) will be granted are:<\/p>\n

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The filer suffered a catastrophic event in a federally declared disaster area that made the filer unable to resume operations or made necessary records unavailable.<\/li>\n
A filer\u2019s operation was affected by the death, serious illness or unavoidable absence of the individual responsible for filing information returns.<\/li>\n
The operation of the filer was affected by fire, casualty or natural disaster.<\/li>\n
The filer was \u201cin the first year of establishment.\u201d<\/li>\n
The filer didn\u2019t receive data on a payee statement such as Schedule K-1, Form 1042-S, or the statement of sick pay required under IRS regulations in time to prepare an accurate information return.<\/li>\n<\/ul>\n
Need help?<\/strong><\/p>\n
If\u00a0you have questions about filing Form 1099-NEC or any tax forms, contact us. We can assist you in staying in compliance with all rules.<\/p>\n
\u00a0<\/p>\n
\u00a9 2020<\/em><\/p>\n
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There\u2019s a new IRS form for business taxpayers that pay or receive nonemployee compensation. Beginning with tax year 2020, payers must complete Form 1099-NEC, Nonemployee Compensation, to report any payment of $600 or more to a payee. Why the new form? Prior to 2020, Form 1099-MISC was filed to report payments totaling at least $600 […]<\/p>\n","protected":false},"author":3,"featured_media":14882,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7,10,29],"tags":[28],"class_list":["post-14883","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-articles","category-news","category-taxes","tag-small-business-tax"],"_links":{"self":[{"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/posts\/14883","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/comments?post=14883"}],"version-history":[{"count":0,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/posts\/14883\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/"}],"wp:attachment":[{"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/media?parent=14883"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/categories?post=14883"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/tags?post=14883"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}