Managing Form 1099-NEC Reporting After Publication 1220

Delaney McDonald
April 15, 2021

Form 1099-NEC changes in 2020

Since the IRS released Publication 1220, announcing that Form 1099-NEC—for nonemployee compensation—would not be included in the Combined Federal/State Filing (CF/SF) program starting tax year 2020, 37 states have implemented direct state reporting requirements for new Form 1099-NEC. 

Though there are 32 states that participate in the CF/SF program, the majority also require direct state reporting—many with unique formats, thresholds and due dates. 

How to manage direct state reporting

With a lack of guidance from the government and organizations struggling to manage nonemployee compensation reporting, Sovos quickly created a new direct state reporting solution in a matter of weeks. This solution provided an easy way for organizations to report directly to the 37 states that now require direct state reporting.

As the #1 private filer of 1099 forms, Sovos has already helped over 800 clients with direct state reporting, and in January alone, submitted over 2.9M 1099-NEC forms with our new solution.

Because these new 1099 reporting requirements are not going away anytime soon, Sovos’ team of regulatory analysis experts continue to monitor and interpret over 19K taxing jurisdictions worldwide. This ensures our solutions stay updated with the latest Form 1099-NEC and direct state reporting requirements from the 30+ states that are not supported in the IRS Combined Federal State Filing (CF/SF) program.

What to expect from Form 1099-NEC moving forward

There are still a lot of unanswered questions about how the IRS will handle Form 1099-NEC moving forward. However, due to the effort put into states’ direct state reporting programs, the continual increase in gig workers and the ongoing effects from the pandemic, we predict more reporting changes in the future. 


Take Action

Learn how Sovos can help you with 1099-NEC reporting with this short 8 minute demo.

Sign up for Email Updates

Stay up to date with the latest tax and compliance updates that may impact your business.


Delaney McDonald

Share This Post

North America Sales & Use Tax
June 5, 2023
Sovos Onboarding: 6 Departments Dedicated to Customer Success

If you are evaluating Sovos, we want you to understand expectations for the customer experience and what teams are there to support you. At Sovos, we have a range of teams ready to support you from the day you sign a contract. Whether it be a customer success representative to review the value you are […]

North America Sales & Use Tax
June 1, 2023
3 Things to Remember if You Get a Sales Tax Notice

Have you ever received a sales tax notice from a state department of revenue? Whether you answered yes or no, there are important things to keep top of mind to help keep your business prepared. Finding out that you have failed to comply with one or more of your sales tax obligations can be startling. […]

EMEA VAT & Fiscal Reporting
May 31, 2023
Bizkaia: What is Batuz LROE?

The Ledger of Economic Operations (Libro Registro de Operaciones Económicas), also known as LROE, is a main compliance element of the Batuz tax control system. This system is under implementation in the province of Bizkaia, located in the autonomous Basque community in Spain. Taxpayers under the Batuz mandate must comply with both TicketBAI and LROE […]

North America Unclaimed Property
May 30, 2023
How to Set Up a Successful Unclaimed Property Program

Unclaimed property compliance can be difficult and overwhelming. Clients often ask what they should be doing to ensure they are compliant with the various laws and regulations. It isn’t easy, especially if you have multiple property types such as checks, credits or customer accounts that have the potential to become unclaimed property in multiple states. […]

North America ShipCompliant
May 30, 2023
How Hold At Locations Improve Your Customers’ Wine Delivery Experience

Direct-to-consumer shipping wine lovers enjoy the convenience of having their favorite vinos shipped to their front door. But what happens when, for whatever reason, they aren’t available to accept their wine deliveries? Whether they aren’t available during the day or they don’t have someone 21 or older available to sign for their package, these challenges […]