Over 1,000 drafts for 2021 tax forms are now available through the IRS website.
For more information about filing the 1099-NEC, check out this article.
Form 1099-NEC Changes for 2021
Though this form was renewed for the 2020 tax year, there won’t be many changes for the 1099-NEC in tax year 2021.
Most of the changes were to the form’s design and to revise dates for the next year.
It is worth mentioning, this addition to Instructions for Recipient Box 1:
“Note: If you are receiving payments on which no income, social security, and Medicare taxes are withheld, you should make estimated tax payments. See Form 1040-ES (or Form 1040-ES-NR). Individuals must report these amounts as explained in these box 1 instructions. Corporations, fiduciaries, and partnerships must report these amounts on the proper line of their tax returns.”
Form 1099-MISC Changes for 2021
The 1099-MISC form for 2021 has not been changed in terms of design or appearance, with the exception of dates being updated to reflect the tax year 2020.
The instructions for 2021, however, have removed the following note under the “Amounts shown may be subject to self-employment (SE) tax”:
“Note: If you are still receiving payments on which no income, social security, and Medicare taxes are withheld, you should make estimated tax payments. See Form 1040-ES (or Form 1040-ES-NR). Individuals must report these amounts as explained in the box 14 instructions on this page. Corporations, fiduciaries, or partnerships must report the amounts on the proper line of their tax returns.”
Another change to the Instructions for Recipient section is the removal of all mentions of the form 1040-SR, and other sections are mow omitting mention of form 1040-NR as well.
Further changes to Box 5 instructions were made. Rather than saying” an amount in this box means the fishing boat operator considers you self-employed”, the instructions are much more specific: Box 5 “shows the amount paid for the purchase of fish for resale from any person engaged in the trade or business of catching fish, or the amount paid to a fishing boat crew member who is considered by the operator to be self-employed.”
Box 12 has added clarification on where to find nonqualified deferred compensation (NQDC). This amount will be shown in Box 1 of the 1099-NEC.
Keep in mind the 2021 PDFs linked here are drafts, not the IRS’s final publication. There may be more changes in the future.