What businesses need to know about Form 1099-NEC in 2023
New years often bring changes, and tax forms are no exception.
We know 1099s can be a little confusing, so we’re here to tell you everything you need to know about Form 1099-NEC for the 2022 tax year.
What is Form 1099-NEC?
Form 1099-NEC is an IRS tax form that is used to report payments of $600 or more made to non-employees. This was previously reported on box 7 of Form 1099-MISC, but the IRS has separated reporting for non-employee compensation with the 1099-NEC.
Businesses should use this form report
Other forms of compensation for service
What information should be reported on 1099-NEC?
If you have made any of the following payments during the year, the IRS requires you to file Form 1099-NEC.
At least $600 or more to the payee during the year
Payments to individuals who are not on your payroll
Paid an individual, estate, partnership, or corporation
Made payments for services related to your trade or business
If you made the payment, then you are the payer. The following information is needed to complete this tax form.
Federal income tax withheld
(State filing requirements) State income, payer state number, and state tax withheld
Is there anything new on 1099-NEC for 2022?
Until 2019, Form 1099-MISC was used to report non-employee compensation. In 2020, the IRS reintroduced Form 1099-NEC for this purpose.
There are no updates to the form for the 2022 tax year.
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