1099 Guide for Contractors
This guide will help you contractors the right 1099 filing method, right forms, and get everything done on time, easily.
YOU LIKELY NEED DIFFERENT 1099 FORMS THIS YEAR…
If you have used 1099MISC forms to report payments to contractors, freelancers or any type of nonemployee compensation (using Box 7), you need to change to the new 1099NEC forms for 2021.
LUCKILY, WE HAVE ONE EASY SOLUTION!
Instead of hassling with new forms, wondering if your software meets the new requirements – make the switch to online filing this year.
DiscountEfile.com is super simple and secure. Easily import data from QuickBooks and have us do the rest!
We’ll print and mail recipient copies and e-file with the IRS for one low price.
WHAT IS 1099NEC?
Income reporting for non-employees.
It is used to report $600+ in non-employee compensation previously reported on 1099-MISC forms. This was a new form in 2020, and it has a new 3up format for 2021.
WHEN IS IT DUE?
Forms must be mailed to recipients by January 31.
They must be also be e-filed with the IRS by January 31 (if you have 10+ recipients for a single payer) or mailed by Jan 31, 2022 with a 1096 transmittal summary form.
WHO SHOULD USE IT?
Businesses required to report payments of $600+ to non-employees.
Any business who pays contractors, freelancers, attorneys or any person considered a non-employee must report payments of $600+ during the tax year.
1099NEC FORMS CHANGE TO 3UP FORMAT FOR 2021
New 1099NEC forms for reporting payments to non-employees (contractors, freelancers, etc) were new in 2020, and are changing again this year to a 3up format (instead of the 2up format last year). This means you will need new forms and envelopes!
If you have used 1099MISC in the past to report non-employee compensation in box 7, you MUST USE NEW 1099NEC FORMS in 2021.
We have official forms, blank perforated paper, pressure seal forms, carbonless forms, compatible envelopes and everything you need for easy printing.
E-FILING REQUIREMENTS MAY CHANGE FOR 2021
The IRS is now considering changing the 2021 e-filing threshold for 1099 & W2 forms.
It is now 250+ forms, but could change to 100+ when they make a final decision in November.
Please stay tuned to Discount Tax Forms and the Official IRS Instructions website for finalized regulations.
We make it e-filing 1099 & W2 forms easy with our DiscountEfile.com system! We can even print and mail recipient copies for you!
1099 Form Due Dates for 2021.
The 1099NEC forms must be mailed to recipients and e-filed or mailed to the IRS on or before January 31, 2022.
For other 1099s, file by February 28, 2022, if you file on paper, or by March 31, 2022, if you file electronically.
The due dates for furnishing payee statements remain the same.
Possible New E-Filing Requirements
The IRS is considering changing the e-filing threshold to 100+ total 1099 & W2 forms per payer. They will make this decision by November. Stay tuned to Discount Tax Forms for details...
DiscountEfile.com helps you get it all done, easily!
1099-NEC Forms for Nonemployee Compensation
The 1099-NEC was a new form in 2020 for business taxpayers to report payments of nonemployee compensation.
Starting with tax year 2020, taxpayers must complete this form to report any payment of $600 or more to a payee.
For the 2021 Tax Year, it has changed to a 3up format (it was 2up). New forms and envelopes will be required.
It was streamlined in format to include a few strategic changes, such as the addition of Box 2 to avoid the need to file both a 1099-MISC and 1099-NEC. The IRS also deleted the FATCA filing requirement box and two large red boxes.
As a result of the form updates, the 2021 form was resized to accommodate 3 forms per page and save paper.
Other 1099-NEC Form Changes for 2021
Form 1099-NEC, box 1.
Box 1 will not be used for reporting under section 6050R, regarding cash payments for the purchase of fish for resale purposes.
Form 1099-NEC, box 2.
Payers may use either box 2 on Form 1099-NEC or box 7 on Form 1099-MISC to report any sales totaling $5,000 or more of consumer products for resale, on buy-sell, deposit-commission, or any other basis. For further information, see the instructions later for box 2 (Form 1099-NEC) or box 7 (Form 1099-MISC).
Generally, this form is due by January 31st - to be mailed to the recipient and mailed or e-filed with the IRS.
There is no automatic extension for this form but may be available under certain hardships.
Nonemployee compensation may be subject to backup withholding if a payee has not provided a taxpayer identification number to the payer or the IRS notifies the payer that the TIN provided was incorrect.
More information about this form can be found here: Form 1099-NEC, Nonemployee Compensation
1099-MISC Form Changes
Form 1099-MISC title change.
The title for Form 1099-MISC has been changed from Miscellaneous Income to Miscellaneous Information.
Form 1099-MISC, box 11.
Box 11 includes any reporting under section 6050R, regarding cash payments for the purchase of fish for resale purposes, from an individual or corporation who is engaged in catching fish. For further information, see the instructions for box 11, later.
1099 Rules that can make or break you
Deadlines for 2021 1099 & W-2 Filing
January 31, 2022
All 1099 Recipient Copies B / C / 2 mailed to recipient
W-2 Employee Copies B / C / 2 mailed to employees
1099-NEC for contractors - Copy A forms to IRS (via mail or e-file, which is required for 100+ forms)
W2 Copy A to IRS (mailed or e-filed)
February 28, 2022 - Paper 1099 Copy A forms to IRS
1099 Form Copy A, along with 1096 Transmittals, mailed to the IRS for all 1099 forms except 1099-NEC with non-employee compensation, which are due January 31.
March 31, 2022 - E-file 1099 forms with IRS
1099 Forms E-filed to the IRS, except 1099-NEC with non-employee compensation, which are due January 31.
Easy 1099 & W-2 Starts with Your Software System
Your accounting software is the first step to filing 1099 & W-2 Forms the easiest way.
You have 3 main options.
Your Accounting Software
If your accounting software prints 1099 & W-2 Forms, you can purchase compatible forms and envelopes.
The program will summarize all of the wage data for the year, then print recipient and government copies.
Important: Forms must the layout used in your software.
If your accounting software does NOT print the forms, specialized 1099 & W-2 software is ready to help!
Import wage data, or manually enter it into the system. Then, print the 1099 or W-2 forms you need. E-filing is also typically available.
Be sure that forms are compatible with the layouts programmed into the software.
The easiest way to file less than 50 forms is online! Discount E-file takes care of printing and mailing recipient copies for you, plus e-files with government agencies.
You simply import or type in data and we do the rest!
E-Filing is required for 100+ forms, but you can e-file as few as one!
1099 - Choosing the Right Forms
Select the right type of 1099, in the right format, for easy printing and mailing.
2] Number of 1099 Parts
The number of parts you need is based on which government agencies you need to file with - Federal, State, and/or City.
- Copy A: Federal Government (Red Copy)
- Copy B: Recipient Copy
- Copy C/2: Payer or State Copy
AK, CA, FL, GA, IL, IN, IA, KY, LA, MD, MI, MO, NV, NH, NM, NY, OR, SD, TN, TX, VT, WA, WY
AL, AR, AZ, CA, CO, CT, DE, DC, GA, ID, IL, IN, IA, KS, KY, LA, ME, MD, MA, MI, MN, MO, MS, MT, NE, NJ, NM, NC, ND, OH, OK, OR, PA, RI, SC, UT, VT, VA, WV, WI
AL, AZ, CO, CT, DE, HI, ID, ME, MA, MN, MS, MT, NE, NC, ND, OH, OK, PA, SC, UT, WI
3] Type of Paper
Preprinted 1099 Forms are for software that only prints the data. Boxes are preprinted on the form and recipient instructions are preprinted on the back.
Blank 1099 form paper is for software that prints form boxes and data. Recipient instructions can be printed on the back. If they aren't, you must supply them per IRS regulations.
Continuous, pin-fed 1099 forms can be used with typewriters or dot-matrix printers.
Don't Forget 1099 Envelopes
Use compatible envelopes to ensure the recipient and return addresses show through the windows correctly.
1096 Transmittal Forms
When mailing 1099 Copy A forms to the IRS, include one 1096 form for each payer. This form summarizes all of the 1099-MISC submitted by the payer.