Beginning with tax year 2020, the Internal Revenue Service (IRS) has published a new reporting form, Form 1099-NEC, for reporting non-employee compensation; this information was previously reported on Form 1099-MISC. The new form will be used to report various payments, including non-employee director fees and payments to independent contractors.
The Protecting Americans from Tax Hikes Act of 2015 (PATH Act) also created a new due date of January 31 for both paper and electronic filing of Form 1099-NEC. The January 31 due date, (Feb. 1, 2021, for tax year 2020), applies for filing to both the recipient and IRS. The IRS has eliminated any automatic extensions for filing Form 1099-NEC, and the due date for filing all other payments reported on Form 1099-MISC remains unchanged from previous years – February 28 (paper forms) and March 31 (electronic). The staggered due dates can create a hardship for entities filing and reporting payments on Form 1099-MISC and 1099-NEC. Additionally, the boxes for Form 1099-MISC have been redesigned for these changes.
Financial institutions that file Form 1099-MISC to report non-employee compensation and other miscellaneous payments should be aware of these changes for 2020. For more information about these changes, reach out to us at email@example.com.
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 Instructions for both forms may be found here.