Form 1099-NEC or Form 1099-MISC?

Historically, when you have paid $600 or more during a year to a nonemployee, you were required to file form 1099-MISC (using box 7) by January 31 of the following year.  This would include anyone who performed a service (non-employee compensation) for the business or church (independent contractors, guest speakers, etc.).

Beginning in 2020, the IRS has replaced form 1099-MISC with form 1099-NEC for any “nonemployee compensation”.   Form 1099-MISC will still be used for other forms of payments.  Also, form 1099-MISC  box 7 will instead be used for “Payer made direct sales of $5,000 or more of consumer products to a buyer (recipient) for resale”.

Form 1099-NEC is not new, but it has not been used since 1982.  “NEC” stands for “non-employee compensation”.  What gets reported on form 1099-NEC?  “fees, commissions, prizes, awards and other forms of compensation paid to an independent contractor”.

In summary:  Form 1099-NEC, Box 1 will replace any payments you previously filed on Form 1099-MISC, box 7.

The deadline for filing Form 1099-NEC is January 31.  The deadline for form 1099-MISC is March 31.

As always, you are required to obtain a signed form W-9 from any independent contractor prior to payment.