updated 01/10/2025
In 2021 the IRS announced major 1099-NEC form updates, changing the layout to 3 forms on a page, as compared to the previous year when there were 2 forms on a page.
However, they have made some changes that may impact your processes.
Just like in previous years, you'll need the newer style of envelopes to mail your form 1099-NEC. Envelopes designed to match the old two-to-a-page format won't work with the three-to-a-page configuration.
In addition, it's always a smart idea to make sure your accounting software package is up-to-date and current. Check with your software vendor to confirm that you have the most up-to-date version before you print your 1099 forms.
We hear this question a lot since the IRS rolled out the 1099-NEC form. What’s the difference between the 1099-NEC form and 1099-MISC, and which one should I use?
The short answer is: in 2020, the 1099-NEC form replaced Box 7 on the old 1099-MISC. This is the box for reporting non-employee compensation. If you paid any non-employee more than $600 for services last year, you need to file form 1099-NEC. The same holds true if you withheld any income tax for a non-employee (regardless of the total amount of compensation).
If you're filing to report consumer products for resale in an amount totaling $5,000 or more, you can use either Box 2 on Form 1099-NEC or Box 7 on Form 1099-MISC. Just make sure you complete filing anything that uses Form 1099-NEC by the January 31, 2025 form deadline.
Prior to 2020, you reported non-employee compensation in Box 7 on form 1099-MISC. This caused a lot of headaches! The deadline for reporting non-employee compensation is January 31, but the deadline for the rest of the reporting done on form 1099-MISC is later. (February 28 for paper filing, March 31 if filing electronically.) By reporting both types on the same form, filers risked late penalties on an entire batch of forms filed after January 31, even if only some of the forms had an amount in Box 7 - i.e., only some of the forms were actually late.
All non-employee compensation must be reported on form 1099-NEC by January 31, whether you're filing online or by mail. All other types of income typically reported on the 1099-MISC must be filed by February 28 if filing on paper forms, or March 31 if filing electronically.
We carry all types of tax forms in our warehouse, ready for same-day/next day shipping (or delivery in the Boise metro area). We also carry matching envelopes for all of our in-stock forms, so you never have to worry about finding what you need to mail your forms on time. Shop online for your 1099 forms here, call us at 208.342.3676, or leave us a note. We'll help you get exactly what you need, when you need it!