Businesses that generally report payments to workers on Forms 1099-MISC will need to adapt. Beginning with the 2020 tax year, payments of at least $600 made for services performed by a non-employee must be reported on the new Form 1099-NEC (Nonemployee Compensation). Previously this information was reported on Form 1099-Misc, box 7. In addition, if a business files a Form 1099-NEC that includes a mismatch between the recipient’s name and taxpayer identification number, the IRS may assess a notice and penalty for incorrect reporting. To avoid this issue, the IRS recommends securing a Form W-9 (Request for Taxpayer ID Number and Certification). Contact us with questions.
