If you hire a contractor in 2020, it’s important to know that the IRS has released a new form for reporting money your business pays to contractors. This new form, called the 1099-NEC, is short for Non-Employee Compensation and will replace “Box 7” on the 1099-Miscellaneous form.
⚠️ Be Aware: The 1099-NEC form is for reporting nonemployees payments made in 2020. If you are reporting payments made to nonemployees in 2019, use the 2019 version of Form 1099-MISC or file now.
It’s also important to keep in mind that the 1099 miscellaneous form will still be required for reporting other income such as rent, royalties, healthcare payments, etc., which means most businesses will have to file two separate forms.
If you are currently a business that is using box 7 on the 1099 miscellaneous, you will have to move that info to box 1 on the 1099-NEC for 2020.
Sounds like a headache right?
The good news is you don’t have to worry about it if you file with WageFiling. As a Quality Supplier to the IRS since 1996, we have the 1099-NEC form ready to go! We have live updates sent to us from the IRS that we share with our customers and can even send you reminders when it’s time to file.