The IRS provided on its website that business taxpayers who pay or receive nonemployee compensation (NEC) are required to file the reinstated Form 1099-NEC, Nonemployee Compensation, pursuant to the related instructions.
Starting in tax year 2020, payers must complete this form to report any payment of $600 or more to a payee. Form 1099-NEC is used to report payments made for services performed by someone who is not an employee, cash payments for fish, and withholding of federal income tax under the backup withholding rules. Such information was previously reported on Form 1099-MISC. However, payments with respect to deceased employees continue to be reported on Form 1099-MISC (accrued wages, vacations and other compensation paid in the same year the employee died must also be reported on Form W-2 for Social Security and Medicare tax purposes).
Generally, payers must file Form 1099-NEC by Jan. 31. For 2020 tax returns, the due date is Feb. 1, 2021, because Jan. 31, 2021, falls on a Sunday. There is no automatic 30-day extension to file Form 1099-NEC. However, an extension to file may be available under certain hardship conditions.
Contacts:
Jeff Martin
Partner
Washington National Tax Office
Washington, D.C.
Tax professional standards statement
This content supports Grant Thornton LLP’s marketing of professional services and is not written tax advice directed at the particular facts and circumstances of any person. If you are interested in the topics presented herein, we encourage you to contact us or an independent tax professional to discuss their potential application to your particular situation. Nothing herein shall be construed as imposing a limitation on any person from disclosing the tax treatment or tax structure of any matter addressed herein. To the extent this content may be considered to contain written tax advice, any written advice contained in, forwarded with or attached to this content is not intended by Grant Thornton LLP to be used, and cannot be used, by any person for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code.
The information contained herein is general in nature and is based on authorities that are subject to change. It is not, and should not be construed as, accounting, legal or tax advice provided by Grant Thornton LLP to the reader. This material may not be applicable to, or suitable for, the reader’s specific circumstances or needs and may require consideration of tax and nontax factors not described herein. Contact Grant Thornton LLP or other tax professionals prior to taking any action based upon this information. Changes in tax laws or other factors could affect, on a prospective or retroactive basis, the information contained herein; Grant Thornton LLP assumes no obligation to inform the reader of any such changes. All references to “Section,” “Sec.,” or “§” refer to the Internal Revenue Code of 1986, as amended.
More tax hot topics
No Results Found. Please search again using different keywords and/or filters.