Form 1099-NEC (2020)

Overview of 2020 Form 1099 NEC

The Form 1099-NEC was brought back into use by the IRS for the tax year 2020 to separate non-employee compensation from the Form 1099-MISC. The blank 1099 NEC form 2020 printable is dedicated to reporting payments totaling $600 or more to individuals who are not your employees, such as independent contractors, freelancers, or other self-employed individuals. Businesses and payers must issue this form to their payers and file it with the IRS.

How to correct a 1099 NEC form 2020

Even with the utmost care, mistakes happen. If you need to correct information after a 1099-NEC has been filed, the process involves filling out a new form with the correct information and checking the "CORRECTED" box at the top of the form. It's important to also provide the corrected form to the recipient and to the IRS to avoid mismatching information during tax processing.

How to Fill Out 1099 NEC Form 2020 PDF

When it's time to fill out the form, here are IRS form 1099 NEC 2020 instructions you need to follow:
To complete Form 1099-NEC on the PDFliner platform, follow these specific steps:

1. Identify the business or individual making the payment and input their legal name and the address of their principal place of business, including the suite number, if applicable, in the corresponding fields. 
2. Enter their city, state, and ZIP code, followed by their contact number.
3. Enter the nine-digit Taxpayer Identification Number (TIN) for the payer, which could be an Employer Identification Number (EIN) or a Social Security Number (SSN), depending on whether the payer is a business or an individual.
4. Proceed to the recipient’s section and input the recipient's TIN. This could be the recipient's SSN, Individual Taxpayer Identification Number (ITIN), or EIN, as applicable.
5. Provide the full legal name of the individual or entity receiving the payment. If it is a business entity, ensure the name matches the one associated with the TIN provided.
6. Input the recipient's address details, including the apartment number if applicable, followed by their city, state, and ZIP code.
7. If the recipient is subject to the Foreign Account Tax Compliance Act (FATCA) reporting, check the appropriate box. However, this might not be commonly applicable for domestic taxpayers.
8. If you have an internal system to manage multiple accounts or recipients, supply your specific account number to differentiate this form from other forms you might issue.
9. Report the total amount of nonemployee compensation paid to the recipient throughout the year in the designated dollar amount box.
10. If federal income tax was withheld from the payments made to the recipient, declare the total in the box provided for federal income tax withheld.
11. For independent contractors and recipients who reside or work in states with income tax requirements, you may need to report the state tax withheld, which will be entered in the appropriate box.
12. Supply the payer’s state number. This refers to the payer's identification number issued by the state, which differs from the federal TIN.
13. Enter the total amount of income you reported to the state tax department for the recipient in the designated state income box.

Why is the IRS 1099 NEC form 2020 important?

For both payers and payees, the 1099-NEC form is a critical document. It helps the payer meet tax obligations by accurately reporting the amounts paid to non-employees. For independent contractors, it's essential to report income accurately on their own tax returns. Failing to do so may end up causing tax issues or audits.

Versions:

Current version of form 1099-NEC

Fillable 1099-NEC 2021