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The IRS has created a new Form 1099-NEC and revised Form 1099-MISC for 2020. The major change is that all nonemployee compensation must now be reported on the new Form 1099-NEC. This was previously reported on Form 1099-MISC. See below for a breakdown of the changes.

Form 1099-NEC:

  • Form 1099-NEC is used to report nonemployee compensation – this was previously Box 7 on Form 1099-MISC
  • The following will be reported in (Box 1) on Form NEC when they have paid at least $600 during the year:
    • Services for someone who is not their employee (including parts and materials)
    • Cash payments for fish (or other aquatic Life) purchased from someone in that trade or business
    • Payments to an attorney.
  • Form is due to IRS and the recipient by February 1, 2021, either via paper or electronically

Form 1099-MISC:

  • Form 1099-MISC is used to report:
    • Rents (Box 1)
    • Royalties (Box 2)
    • Other income (Box 3)
    • Backup withholding (Box 4)
    • Fishing boat proceeds (Box 5)
    • Medical and health care payments (Box 6)
    • (Box 7 revised – was Box 9) – you check this box if – Payer made direct sales of $5,000 or more of consumer products to buyer for resale
    • (Box 9 revised – was Box 10) – Crop insurance proceeds
    • (Box 10 revised - was Box 14) - Gross Proceeds Paid to an Attorney that are not reported on 1099-NEC.
    • (Box 12 new) – report Section 409A deferrals
    • (Box 14 revised) – report nonqualified deferred compensation
  • Form is due to recipient by February 1, 2021. Filings to the IRS by paper are due by March 1, 2021 or if filing electronically it is due by March 31, 2021


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