Is there a 1099-NEC for 2019?

Updated July 16, 2020

Form 1099-NEC is availble for 2020 onwards. Report prior year payments on Form 1099-MISC.

Form 1099-NEC is being reintroduced starting in 2020 to report non-employee payments. Before this change, 1099-MISC was used for non-employee compensation. If you are filing forms for previous year including 2019, 2018, 2017, and have to report non-employee compensation, then you will need to use Form 1099-MISC. Form 1099-NEC is not available for previous years.

Starting in 2020 a number of changes have been made to Form 1099-MISC and the most important change is that the box 7 is no longer used for non-employee compensations. The gross proceeds paid to a lawyer that were once reported in Box 14 will have to be reported in Box 10 for 2020.

If you need to pay a contractor additional payment other than non-employee compensation, that is normally reported on Form 1099-MISC, then you would end up issuing two separate forms to the same contractor. You would issue 1099-NEC for non-employee contribution and additionally use 1099-MISC for other payments

If backup withholding is needed, then it must be distributed based on the amount of non-employee compensation and other payments, and must be reported accordingly on these two forms separately.

Lawyers often perform several services and when the services related to a specific litigation matter, any subsequent payments will be reported on 1099-MISC in Box 10 (Gross Proceeds Paid to an Attorney). Those services that involve general business matters will require the payments to be reported on 1099-NEC. Legal services such as advice on employment hiring, reviewing contracts, or reviewing the contract for real estate are covered by the requirement. If both general legal services and services relating to general business matters are performed by the same lawyer, there will be separate 1099 forms that will have to be filed for separate payments.

Important Note:

The IRS allows businesses to file for current year as well as for previous three years, but there may be some penalties for filing late. Please check out how to avoid 1099 filing penalties.

We at eFile360 provide filing services for current year as well as previous three years forms.