Why did the IRS introduce Form 1099-NEC?
1.1k views |
Last modified 12/29/2020 5:16:25 AM EST
Previously, taxpayers could file Form 1099-MISC to report nonemployee compensation and miscellaneous income items by February 28 each year. In 2015, the PATH Act changed the 1099-MISC Form due date to January 31 for reporting nonemployee compensation.
Because of the change in due date for nonemployee compensation, taxpayers had to begin separating nonemployee compensation using two 1099 Forms. This change not only caused confusion for taxpayers and employers but also caused the IRS to mistakenly treat forms received after the January 31 deadline as late returns.
So, the IRS has brought back Form 1099-NEC to separate nonemployee compensation to clear up the confusion. With ExpressEfile, you can e-file both Form 1099-NEC and 1099-MISC easily and securely.