Good Evening business owners!

Some important news to share and make you aware of that may impact you for this coming tax filing season.

The Internal Revenue Service has reinstate form 1099-NEC for all business that pay independent contractors. Instead of utilizing form 1099-Misc and completing Box 7 for non employee compensation, you will instead utilize this revised form 1099-NEC in its place. This form was discontinued in 1982 and is resurrected as a result of the PATH act compliance concerns.

While 1099-Misc may be filed as late as Feb 28 if filed on paper and March 31 if electronically filed, the new 1099-NEC must be field by January 31 with no extensions available. This year, January 31 falls on a Sunday, so the actual deadline will be February 1, 2021.

The most important thing to note is that with only disaster related extensions entertained, you will be penalized for filing these late.  We expect substantive enforcement of these late filing penalties as well.

Please note that the requirements to file a 1099 for a non employee remain the same, where anyone who is not your employee is paid $600 or more in a calendar year is required to receive one.

Please be prepared at tax time and ensure you have the W9 for all independent contractors completed and signed by the party.

For our great clients that we prepare your 1099’s as part of your engagement, please be sure you have and provide us with the reporting information for each vendor/contractor so that we can provide your 1099’s in a timely manner for you. We cannot be responsible for a late filing if the information we receive from you is incomplete.

Thanks and have a great holiday!