Upcoming Changes For The New 1099-NEC Form
Our Tax Season blogs start with the new 1099-NEC form
Did you know that the Form 1099-NEC (Non-Employee Compensation) has actually been around since 1982? For 2020 activity, the new Form 1099-NEC will replace Form 1099-MISC for reporting non-employee compensation (in Box 7). In addition, the 1099-MISC will continue to be used for reporting all other types of compensation.
To accommodate these changes, patch 38 for The Financial Edge will modify the existing 1099 Distribution screen by removing the unnecessary box numbers. Instead the box descriptions will determine the flow of the 1099 amounts into the appropriate 1099-NEC or 1099-MISC forms (mapped out in knowledgebase article 192312). Another throwback to the 80’s, the box numbers remind of Sting singing 1, 2, 3 in the popular Police song Murder by numbers.
Two new fields, the NEC-Federal Income tax withheld and NEC-State Income tax withheld, will also be added to Queries, Imports, Exports and the 1099 Activity Report in Reports>Vendor Reports.
In addition, the 1099 parameter in Mail>Forms will be updated with a drop-down selection so you can generate the 1099-MISC or 1099-NEC form. The option selected will determine the information pulled into Aatrix to produce the corresponding form. The overall process will look and feel as it has in years past, with the exception of the new option to select the appropriate form.
More fun facts can also be found in our 1099-NEC FAQ Knowledgebase article 194890.
Join us for our webinar on December 3 to learn more: Financial Edge: The Newest Updates for the 1099-NEC: What you need to know