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

Sovos
January 6, 2021

Updated Feb. 2, 2021

With the latest IRS announcement in Publication 1220 stating that information reporting data for the new Form 1099-NEC, Nonemployee Compensation, 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:

Utah

Utah to Require Reporting of Form 1099-NEC

The Utah State Tax Commission has informed Sovos that it will require the filing of Form 1099-NEC with the Commission when it reports Utah state withholding. Utah requires reporting of all 1099 forms when those forms report Utah withholding. Utah has indicated to Sovos that it its filing systems will be able to accept the electronic filing of Form 1099-NEC. Utah requires the filing of 1099 forms with the state by January 31. Electronic reporting of 1099 forms to Utah requires the inclusion of the Utah withholding account identification number.

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

Alabama

Alabama To Require 1099-NEC Reporting for TY 2020

The Alabama Department of Revenue recently confirmed by telephone that payers will be required to file Form 1099-NEC with the state in accordance with existing information return filing requirements. Alabama has not updated their guidance to date and is unlikely to do so prior to the state’s due date for 1099 forms. However, Form 1099-NEC will be among the required reporting for the taxable year, subject to the same filing threshold: if state withholding is reported or if the payment reported on the form represents $1,500 or more in Alabama taxable income the 1099-NEC must be reported directly to the state. The 1099-NEC will be due along with all other 1099 forms reported to Alabama on January 31, 2021.

When filing 1099 forms electronically, including Form 1099-NEC, filers must include a state ID, known in Alabama as a State Employer Account Number or Alabama Withholding Tax Account Number.

To review the existing guidance for 1099 reporting to Alabama, click here to visit the Alabama Department of Revenue’s website.

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.

California

California’s Franchise Tax Board has indicated it will require filing of Form 1099-NEC to the Board when the form reports payments made to a full- or part-time California resident or when reporting a California transaction. California will require filing by February 28 for paper filers and March 31 for electronic filers. California does not require the reporting of a state tax identification number in its electronic filings.

To review California’s “Tax News January 2021,” which states the Form 1099-NEC filing requirement, please follow this link.

Colorado

Colorado to Accept Form 1099-NEC for Tax Year 2020

Colorado’s Department of Revenue has announced it will accept Form 1099-NEC for tax year 2020. Colorado will accept electronic filing through its Revenue Online service beginning January 5, 2021.  Form 1099s must be filed with the Department by February 1, 2021.

Colorado has yet to provide any revised specifications for 1099 form reporting for tax year 2020. Prior guidance, last revised in 2016, directs filers to use the federal 1220 standard for filing 1099s. Presuming Colorado does not provide contrary direction, the use of the federal 1220 standard means 1099s reported to Colorado will not need to provide a state tax identification number.

Colorado’s normal 1099 due date is January 31, but the states permits filing by the next business day when the thirty first falls on a weekend, as it will in 2021.  Colorado has not yet stated under what circumstances a 1099-NEC would be require direct filing with the state, but based on other 1099s, it is very likely the state will require it when reporting Colorado withholding.

To review Colorado’s announcement that it will accept Form 1099-NEC, please follow this link.

Connecticut

Connecticut to require filing of 1099-NEC

Connecticut has released its annual 1220 filing specifications and directions.  The state will require the filing of Form 1099-NEC when the form is issued to a resident of the state or if reporting a transaction that occurred within the state. Filers will need to provide their Connecticut Tax Registration number when filing the forms electronically. Forms 1099 are due to Connecticut January 31, 2021.

To review the Electronic Filing Requirements, 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.

Georgia

Georgia to Require Form 1099-NEC for Tax Year 2020

Georgia’s Department of Revenue will require Forms 1099-NEC for tax year 2020. Georgia will accept electronic filing of Forms 1099-NEC that are required by the IRS and have Georgia tax withheld. Forms 1099 must be filed with the Department by January 31, 2021.

At this time, Georgia has not released updated specifications for 1099 form reporting for the 2020 tax year. The last revised guidance dated 2018, directs filers to Federal Format Layout Specifications for Georgia which predominantly follow the federal 1220 standard for filing. Georgia does require a state withholding number to be entered into the record when reporting Georgia withholding. This number is assigned to positions 663-671 in the 1220 record layout. 

Georgia’s normal 1099 due date is January 31, but the state permits filing by the next business day when the due date falls on a weekend or holiday, as it will in 2021. 

To review Georgia’s Employer’s Tax Guide, please click here.  

Hawaii

Hawaii Updates Filing Requirements to Include Form 1099-NEC

The Hawaii Department of Taxation recently updated their 1099 filing requirements to include Form 1099-NEC for tax year 2020 reporting purposes. Hawaii has conformed to the federal use and filing of Form 1099-NEC and will require reporting when the taxpayer is engaged in a trade or business in Hawaii or has a place of business or a fiscal office in Hawaii, and makes payments to recipients in the course of such trade or business in Hawaii. Further, Form N-196 (Annual Summary and Transmittal of Hawaii Information Returns) will be updated and released in January 2021 to include the 1099-NEC so that taxpayers may properly file the form with the Department of Taxation.

For filing purposes, Form 1099-NEC must be filed directly with the Department of Taxation, which means filing must be done using paper returns. Presently Form N-196 must accompany paper returns filed by a taxpayer, and there is no present requirement for a state ID on Form N-196.

To review general information return filing requirements in the state of Hawaii please click here to visit the State of Hawaii Department of Taxation’s website. 

Idaho

Idaho Updates Filing Requirements to Include 1099-NEC for Tax Year 2020

The Idaho State Tax Commission recently released updated guidance for information return filing requirements to include Form 1099-NEC beginning with tax year 2020 reporting. Idaho requires 1099s that report state withholding, and Idaho filing portals will support 1099-NEC electronic filing beginning with the upcoming filing season. Finally, the recently released 1099 electronic filing specifications explicitly call out Form 1099-NEC. Idaho requires 1099 forms to be submitted by February 28, which includes Form 1099-NEC.

Idaho electronic filing requires a valid and active federal employer identification number AND Idaho Withholding Account Number (state ID). 

To review the filing requirement and electronic filing specifications, please click here to visit the State Tax Commission’s e-Filing website.

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.

Massachusetts

Massachusetts to Require Filing of 1099-NEC for 2020 Tax Year

Massachusetts has released its 1099 filing direction for tax year 2020.  The commonwealth will require the filing of Form 1099-NEC starting in tax year 2020.  Form 1099-NEC will be due to the commonwealth by January 31 generally.  For reporting in 2021, the form will be due by February 1, 2021 because January 31 falls on a Sunday.  All other Forms 1099 will be due to the state by March 31, 2021, including Form 1099-NEC which was previously due by January 31.  

Massachusetts follows the federal standard for formatting electronic reporting as outlined in IRS Publication 1220.  Massachusetts does not require reporting of a state ID to the forms.

To review the Massachusetts 1099 filing direction, please follow this link.

Michigan

Michigan to Require Reporting of Form 1099-NEC

Michigan will require filing the 1099-NEC directly with the state when the form reports services performed in Michigan or if state tax was withheld. Form 1099-NEC is due to Michigan by January 31. No state tax identification number is required for electronic filers of Form 1099-NEC.

To review Michigan’s tax withholding guide providing the reporting requirements, please follow this link.

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.

Montana

Montana to Require Reporting of Form 1099-NEC

Montana will require the direct filing of Form 1099-NEC to the state when the form reports state withholding or $600 or more dollars of non-employee compensation. Form 1099-NEC must be reported to the state by January 31, 2021. Montana does not require the reporting of a state identification number in its electronic reporting specifications.

To review Montana’s Withholding Due Dates page, which states the 1099-NEC reporting obligation, 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

Oklahoma

Oklahoma Updates Filing Requirements to Include Form 1099-NEC

The Oklahoma Tax Commission recently updated their Frequently Asked Questions page relating to 1099 filing requirements. Along with the previously required forms, Oklahoma will now require Form 1099-NEC for tax year 2020 and beyond. Filers must report payments of $750 or more made to an Oklahoma resident or to a nonresident when the services were rendered within the state of Oklahoma. Please note that Form 1099-NEC is not supported by the IRS Combined Federal/State Reporting System, so Form 1099-NEC must be filed directly with the state despite Oklahoma’s participation in the program.

1099s must be filed with Oklahoma electronically through the OTC’s OKTAP website. In order to file through the website taxpayers will need a state ID, otherwise known as a Withholding Account ID.

To review the FAQs and the requirements for reporting the 1099-NEC, please click here to visit the Oklahoma State Tax Commission’s website.

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.

Due to high volume, the Pennsylvania Department of Revenue has extended the filing deadline for W2s and 1099s to February 5, 2021.

South Carolina

South Carolina Requires 1099-NEC Filing for Tax Year 2020

South Carolina’s Department of Revenue has informed Sovos that it will accept Forms 1099-NEC filed with state withholding for the 2020 tax year. Forms 1099-NEC reporting South Carolina withholding will be due to the Department by January 31, 2021.

At present, South Carolina accepts filing of Forms 1099 through CD-ROM media. Filers are expected to provide the payor’s South Carolina withholding number.  Filers reporting less than 250 forms may also file on paper.

To review South Carolina’s specifications for filing by CD-ROM, please follow this link.

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.

Virginia

Virginia Updates Filing Requirements to Include 1099-NEC for 2020 Tax Year

In an early release draft, Virginia confirmed that Federal Forms 1099-NEC will be required to be filed with the state for the 2020 tax year. The specifications will require that the 1099-NEC be filed with the state when there is Virginia withholding. All Forms 1099 are due to the state by January 31, 2021. Virginia does not require the addition of a state ID to Forms 1099 filed with the state tax department.  

For further information as it is released, the Virginia Tax website can be found here

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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