Latest Updates: State Direct Reporting Requirements for Form 1099-NEC

Sovos
October 26, 2020

With the latest IRS announcement in Publication 1220 stating that information reporting data for the new Form 1099-NEC  will not be included in the Combined Federal/State Filing (CF/SF) program,  numerous states are beginning to publish direct reporting requirements. The Sovos regulatory analysis team will continuously update this page with the latest state requirements for Form 1099-NEC to help keep your organization ahead.

The most recent state(s) to release 1099-NEC reporting updates:

Nebraska

Nebraska Updates Filing Requirements to Include Form 1099-NEC

The Nebraska Department of Revenue recently published an updated version of Publication 21EFW2, Nebraska Computer Reporting Procedure. These specifications, while built for W-2 reporting, mention a new filing requirement for 1099 forms: Form 1099-NEC joins the W-2, 1099-MISC, 1099-R, and W-2G as a required form when it reports Nebraska income and withholding. Form 1099-NEC is due by January 31 following the taxable year. Nebraska requires a state employer identification number when reporting 1099s electronically in Locations 371-379 in the Payor/Transmitter “A” Record.

Again, please note these specifications are for W-2 reporting purposes only, but are used as a reference to highlight the 1099-NEC filing requirement. The 1099 specifications have not been updated by Nebraska as of this post.

To review Publication 21EFW2 in its entirety, please click here.

Other states that have released requirements around reporting Form 1099-NEC:

Arizona

Arizona Confirms 1099-NEC Filing Requirement

Leading up to the tax year 2020 filing season, Arizona has confirmed that they will require 1099-NEC filing with their Department of Revenue. Presently Publication 701 indicates that all 1099s reporting Arizona income tax withheld are required for state reporting purposes. Further, Sovos has confirmed with the Department of Revenue that Form 1099-NEC will be among those forms required under the same filing requirement.

Form 1099-NEC reporting will be accepted via electronic transmission and paper mediums, with web upload functions becoming available at a later, to be determined date. 

For more information see here.

D.C.

D.C. Updates Electronic Filing Specifications to Require Form 1099-NEC

The District of Columbia’s Office of Tax and Revenue has published its electronic specifications for 1099 forms for tax year 2020. The specifications now state that DC will require payors to report Form 1099-NEC to the state if reporting $600 or more in payments annually.  Forms 1099 are due to the territory by February 1, 2021 as the statutory due date, January 31, will fall on a weekend.

The District of Columbia does not require a withholding identification number, or similar, on 1099s issued to the territory.

To review the specifications, follow this link.

Delaware

Delaware to Require 1099-NEC Reporting for TY 2020

The Delaware Department of Revenue has announced a requirement to file Form 1099-NEC for TY 2020. Through a FAQ published on their website, the 1099-NEC will be due on February 1, 2021 and will be required when the form is issued to a Delaware resident (regardless of where the services were performed) or to non-residents who performed work within Delaware.

To review these FAQs in greater detail, please click here.

Indiana

Indiana Updates its Electronic Filing Specifications to Require Form 1099-NEC

The Indiana Department of Revenue recently published updated electronic filing specifications for information returns, specifically 1099 and W-2G records. Among the updates was the addition of Code “NE”, meant to identify 1099-NEC records filed electronically. This support for the 1099-NEC, paired with the existing 1099 filing requirement to report if an information return reports Indiana state withholding, indicates conclusively that 1099-NEC records must be filed with the state if the record reports Indiana state withholding. These records, like other 1099s reporting state withholding, must be filed directly with the Indiana Department of Revenue.

To review the specifications in further detail, please click here.

Iowa

Iowa System Updated to Accept Form 1099-NEC

The Iowa Department of Revenue recently published an updated version of Publication 44-082, Electronic Reporting of Wage and Tax Statements and Information Returns. This publication provides instructions, information, and specifications for submitting W-2 and 1099 records to the Department electronically.

Primarily the updates to these specifications and instructions involves the acceptance of Form 1099-NEC through the Iowa electronic filing system. 

For more information see here

Kansas

Kansas Updates its Specifications to Require Form 1099-NEC

Kansas recently released its 2020 Specifications for Electronic Submission of 1099 and W2G forms, adding specifications for filing forms 1099-NEC with the state, confirming that Kansas will now require state filing of the form. Generally Kansas requires that all Forms 1099 that must be filed federally must also be filed with Kansas.

To review the specifications, please follow the link here.

Kentucky

Kentucky Updates its Specification to Require Form 1099-NEC

Kentucky recently released its 2020 Specifications for Electronic Submission of 1099 and W2G forms, adding new specifications for filing Form 1099-NEC with the state, confirming that Kentucky will now require state filing of the form. Forms 1099 submissions to Kentucky are required to be in electronic format on CD. Payers issuing 25 or fewer forms must either file Form K-5 or submit the information in the prescribed format on CD. Generally, Kentucky follows the federal specifications with state defined fields in the B Record.

For more information see here.

Maryland

Maryland Updates Electronic Filing Specifications to Require Form 1099-NEC

The Comptroller of Maryland’s Office recently published updated electronic reporting specifications for W-2G and 1099 forms. Among the updates was the inclusion of Form 1099-NEC among the information return filing requirements. The specifications state that Form 1099-NEC must be reported directly to the state if Maryland withholding is greater than zero. The 1099-NEC now joins the other information returns due to the department by January 31.

Please note that a Maryland Central Registration Number, the eight-digit tax withholding account number assigned to registered taxpayers in Maryland, is required when reporting 1099-NEC records to the state.

To review these specifications in further detail, please click here.

Missouri

Missouri Updates Electronic Filing Specifications to Require Form 1099-NEC

The Missouri Department of Revenue has published its electronic reporting specifications for 1099 forms.  The specifications now state that Missouri will require payors to report Form 1099-NEC to the state if reporting $1,200 or more in payments annually.  Forms 1099 are due to the state by March 1, 2021 as the statutory due date, February 28, will fall on a weekend.

Missouri does not require the inclusion of a state withholding identification number, or similar, on 1099s issued to the state.

To review the specifications, please follow this link.

New Jersey 

New Jersey Requiring 1099-NEC for Tax Year 2020

New Jersey’s Division of Taxation has published its annual withholding instructions.  The Instructions now require reporting of Form 1099-NEC to the Division by February 15, 2021.  The forms must be sent to the Division if reporting one thousand dollars or more or if there is state withholding. New Jersey will require this form to be provided electronically. 

To review the withholding instructions, please follow this link.

North Carolina

North Carolina to Require 1099-NEC Reporting for TY 2020

The North Carolina Department of Revenue recently published an important notice relating to information returns due for TY 2020. Form 1099-NEC will now be required for TY 2020 if the statement reports North Carolina income tax withheld. These must be filed on or before January 31, 2021. Filing may be done electronically or on paper using the existing information return filing requirements.

For more information see here.

 

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Author

Sovos

Sovos is a leading global provider of software that safeguards businesses from the burden and risk of modern transactional taxes. As VAT and sales and use tax go digital, businesses face increased risks, costs and complexity. The Sovos Intelligent Compliance Cloud is the first complete solution for modern tax, giving businesses a global solution for tax determination, e-invoicing compliance and tax reporting. Sovos supports more than 7,000 customers, including half of the Fortune 500, and integrates with a wide variety of business applications. The company has offices throughout North America, Latin America and Europe. Sovos is owned by London-based Hg. For more information visit www.sovos.com and follow us on LinkedIn and Twitter.
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