As of July 24th, 2019 the IRS has released the DRAFT version of the 1099-NEC Nonemployee Compensation tax form. The 1099-NEC is designed to separate out the Box 7 Nonemployee Compensation, from the 1099-MISC, onto its own tax form.
The 1099-NEC is designed to separate out the Box 7 Nonemployee Compensation, from the 1099-MISC, onto its own tax form. The IRS rationale is that separate reporting deadlines for NEC and non-NEC amounts on Form 1099-MISC has proven challenging for many businesses. Thus, the agency has revived a previously decommissioned tax form, the Form 1099-NEC, as the solution to this dilemma.
IRS Link - Draft 1099-NEC Tax Form
The 1099-NEC is scheduled to become effective in Tax Year 2020 (which is reported in Calendar Year 2021). However, the 1099-NEC is still only a draft form and is subject to change by the IRS.
The IRS draft instructions for the 1099-NEC are still not publicly posted.
The potential implications of the 1099-NEC form are far reaching. If the 1099-NEC becomes a reality then we can expect a number of changes and downstream implications. Some examples of the possibilities are listed below:
The 1099-NEC will be fully supported by eFileMyForms. The 1099-NEC will be able to be imported, or manually entered, and then submitted for printing, mailing, and/or e-filing as would any other form.
Additionally, please continue to check our News Articles section, or our emailed newsletters, for any IRS updates!