Form 1099-NEC

Nonemployee Compensation will be reported on Form 1099-NEC for 2020. This form, which had not been used since 1982, was brought back by the IRS and will be used solely for reporting nonemployee compensation.

The Form 1099-MISC will continue to be used for miscellaneous income and payments such as rents and royalties.

Why was this changed? Prior to the 2015 Protecting Americans From Tax Hikes Act (PATH Act), the due date for reporting nonemployee compensation to the IRS was February 28th of each year. The PATH Act changed that due date to January 31st. However, the date for miscellaneous income remained February 28th which caused confusion not only to business owners and taxpayers, but caused forms for miscellaneous income, received after January 31st to be treated as late by the IRS. The revival of Form 1099-NEC is intended to clear up that confusion.