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Does your accounting software support the new 1099-NEC tax form? 

 

Request The New 1099-NEC

Don't be caught off-guard by 2020 tax year changes. 

Recently the IRS determined that the 1099-MISC that has been in use since 1982 will be modified and the 1099-NEC will be added to report non-employee compensation for the 2020 tax year. The new 1099-NEC will capture any payments to non-employee service providers, including independent contractors, freelancers, vendors, consultants and other self-employed individuals commonly referred to as 1099 workers.

According to the IRS, a combination of these four conditions distinguishes a reportable payment that should use the new 1099-NEC form, rather than the Box 7 field of the 1099-MISC previously used:

  • Payment is made to someone who is not your employee
  • Payment is made for services in the course of your trade or business
  • Payment was made to an individual, partnership, estate, or, in some cases, a corporation
  • Payments were $600 or more for the calendar year

Why is the 1099-NEC replacing the use of Box 7 on the 1099-MISC? In December 2015 the Protecting Americans from Tax Hikes Act (the PATH Act) created a unique situation for tax filers. It caused some confusion about the misaligned January or February deadline for Form 1099-MISC containing data in Box 7, and potential late filing fees and fraud.

The overall process for reporting non-employee compensation is changing for the 2020 tax year as a result, the new 1099-NEC is part of the update.

Worry-free tax document and processing solutions.

MHC Software offers digital and print solutions for over 20 different tax forms, including: W-2s, 1095-Cs, T4s, 1099s and more. Our tax document solutions enable organizations to simplify the process of generating and distributing tax documents to employees and vendors. Solutions range from software that supports in-house document generation and printing to cost-cutting online document delivery, plus services that eliminate your overtime labor and need for special printing and sealing hardware.