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

Sovos
November 18, 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:

Vermont

Vermont Releases 1099 Specifications, Will Require Form 1099-NEC

The Vermont Department of Taxes recently released an updated version of their e-Filing Specifications for 1099 Reporting for tax year 2020. This publication contains one notable change involving adding support for the electronic filing of Form 1099-NEC through the myVTax online filing system. This added support, when combined with the general 1099 filing standard requiring 1099s that report state withholding OR reporting for payments to nonresidents for services performed in Vermont, amounts to a new requirement for filing Form 1099-NEC under those conditions.

Vermont’s e-filing specifications largely follow the federal specifications as outlined in Publication 1220, with the exception of reporting a taxpayer’s state ID (Vermont Withholding Account Number) in Positions 663-722 of the Payee “B” Record.

To review these e-filing specifications in their entirety, please click here to visit the Vermont Department of Taxes website.

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.

Arkansas

Arkansas Releases W-2 and 1099 Specifications, Requires Filing of 1099-NEC

Arkansas has published its W-2 and 1099 specifications for electronic filing with the state.  The specifications state Arkansas will require reporting of Form 1099-NEC when reporting payments of $2,500 or where there is Arkansas withholding.  

Forms 1099 and W-2 are due to Arkansas by January 31, 2021.

Arkansas does not require the reporting of a state withholding number on 1099 forms reported to it.

To review the specifications, please follow this link.

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.

State ID is required when filing with Delaware.  An employer’s Delaware ID number is its 9-digit Federal employer ID.  If you have any questions about filing 1099s in Delaware, please contact (302) 577-8170.

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

State IDs are required for Iowa if there is state withholding.  Referred to as Business eFile Number(“BEN”). The Iowa DoR assigns a BEN to every business tax entity registering with the Department to withhold Iowa tax. The BEN is used by filers (employers/payers) to log into Iowa eFile & Pay. A bulk filer must use its own BEN to log into eFile & Pay and must report the respective filer’s (employer/payer) BEN on RV and K records when the filer withheld Iowa tax. For more information on obtaining a BEN 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.

Although the file layout does not require state IDs, you can find more information about your Kansas state ID 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 forms 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.

State ID is required when withholding.  The state ID is the Kentucky Withholding Account Number (6 digits).  For more information on obtaining the state ID please see – Kentucky Tax Registration Application and Instructions.

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.

State IDs are required when reporting withholding. State IDs are referred to as Maryland Central Registration Numbers, an eight-digit number assigned by Maryland when you open a state withholding account.  To look up or confirm your Maryland Central Registration number you may contact Taxpayer Service by telephone at 410-260-7980 from Central Maryland, or 1-800-638-2937 and by email at taxhelp@comp.state.md.us. Be prepared to provide the following information: Federal Employer Identification Number (FEIN), name of company, as well as name and phone number of the person inquiring. 

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

Mississippi

Mississippi Adds 1099-NEC to Information Return Filing Requirements

The Mississippi Department of Revenue recently released updated instructions for reporting information returns to the state. While the state does not make specific reference to the 1099-NEC in its instructions for information return filing requirements, the general instruction does include reporting of any payments that exceed $600. Further, Sovos was able to confirm with Mississippi withholding agents that the 1099-NEC is included under that general reporting requirement, and that electronic filing portals will support and accept 1099-NEC records formatted using the e-file specifications found in IRS Publication 1220. Form 1099-NEC, along with other 1099 records, are due February 28, 2021 when filed electronically.

As Mississippi requires 1099 reporting to be formatted using Publication 1220 specifications, there are no requirements or allocated field positions for state ID information.

To review the information relating to 1099 filing requirements, please click here to visit the Department of Revenue website. To review the electronic filing specifications for information returns, including W-2 and 1099 reports, 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.

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.

State IDs are required when filing with Nebraska, these numbers are referred to as the Nebraska ID Number.  For more information about your Nebraska Tax ID Number and how to obtain, please see here.

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

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.

State ID is required when filing 1099-NEC.  Referred to as “State Withholding Account Number” or “NC Withholding ID Number” and must be numeric. To get a NC Withholding ID Number you can register online to receive your withholding number immediately, or file Form NC-BR.  If you send in a paper registration, you should receive your withholding number within four weeks. See the North Carolina Department of Revenue’s FAQs here

Oregon

Oregon Updates Filing Requirements to Include Form 1099-NEC

The Oregon Department of Revenue recently published its electronic specifications for 1099 forms for tax year 2020. The specifications state that Oregon will require payors to report Form 1099-NEC to the state if required to file federally and file over 10 returns. Forms 1099-NEC are due January 31 of the following year. For tax year 2020, January 31 falls on a holiday weekend so the forms are due by February 2. 

Oregon requires a Business Identification Number (BIN) on 1099 records issued within the state. This is a unique identifier for businesses filing in Oregon. For more information about how to obtain a BIN for Oregon, please visit Oregon’s site here.

To review the specifications, please click here.

Pennsylvania

Pennsylvania Releases 1099 Specifications, Will Require Form 1099-NEC

Pennsylvania has released its electronic reporting specifications for 1099 reporting, due to the state by January 31, 2020.  

Pennsylvania requires 1099-NECs to be reported when the form reports compensation for services performed by Pennsylvania residents or when services are performed within Pennsylvania by a non-resident.

Pennsylvania requires the reporting of state withholding identification numbers on 1099 forms issued to the state.

To review the specifications, please follow this link.

West Virginia

West Virginia Releases Draft W-2, 1099, and W-2G Electronic Specifications, State to Require 1099-NEC Reporting

West Virginia has released its draft electronic specifications for W-2s, 1099s, and W-2Gs reported to the state for tax year 2020.  The specifications require 1099-NECs that reflect West Virginia withholding to be reported to the state’s Department of Revenue.  

The due date for W-2s and 1099s reported to the state remains January 31.

Forms 1099 reported to West Virginia require the inclusion of the payor’s state tax identification number.  A tax identification number can be obtained by filing a business registration application, available via this link.  Parties who may be unsure of their tax identification number are invited to call the West Virginia Department of Revenue at 1 (800) 982-8297.

To review the draft electronic specifications for 2020 W-2s filed with West Virginia, please follow this link.

To review the draft electronic specifications for 2020 1099s and W-2Gs filed with West Virginia, please follow this link

Wisconsin

Wisconsin Updates Filing Requirements to Include Form 1099-NEC in Tax Bulletin 211

The Wisconsin Department of Revenue recently published Tax Bulletin 211 which details recent tax changes for various state taxes. Included in this bulletin was the announcement that Wisconsin will be requiring Forms 1099-NEC for employers and other persons who make payments that must be reported federally, including payments made to Wisconsin residents and payments made to nonresidents for services performed in Wisconsin. Forms 1099-NEC must be submitted to the department by January 31. For Tax Year 2020, businesses that must report nonemployee compensation may submit either Form 1099-MISC or Form 1099-NEC to the department.

Wisconsin filers are required to provide a 15-digit Wisconsin withholding tax account number (TAN).  A withholding number is acquired by filing an Application for Wisconsin Business Tax Registration, available via this link. Instructions for the application can be found here. If a filer does not have a Wisconsin withholding number and has never held one then the following placeholder should be used: 036888888888801.

To review Tax Bulletin 211, please follow this link.

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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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