The IRS has released 2020 draft joint 1099-MISC and NEC instructions. Changes to instructions are highlighted below:
- 1099-NEC due January 31, 1099-MISC due March 31 (electronic);
- Specified changes to the 1099-MISC as noted in the instructions’ preamble:
- There is a checkbox in box 7 to indicate direct sales of $5,000 or more;
- Crop insurance proceeds now reported in box 9 (was box 10);
- Gross proceeds to attorneys now reported in box 10 (was box 14);
- Section 409A deferrals reported in box 12 (was box 15A);
- Nonqualified deferred compensation reported in box 14 (new reporting obligation);
- State information now reported in boxes 15-17 (was boxes 16-18);
- Information previously reported in box 7 of the 1099-MISC as non-employee compensation is now reportable in box 1 of the 1099-NEC;
- Payments for termination of self-employed insurance salesmen remains reportable in box 3 of the 1099-MISC, not the NEC;
- MISC box changes:
- Prizes and awards for non-employees, non-contractors now reportable in box 3;
- New box 5: fish proceeds (as distinct from cash sales for fish);
- New box 6: medical and health care payments ($600 reporting threshold);
- Payments to attorneys now reported in box 10 (was box 14) ($600 threshold);
- Section 409A deferrals now reported in box 12 (was box 15A) ($600 threshold);
- New box 14-Nonqualified deferred compensation (previously included in box 7) (also included in box 1 of the NEC);
- Notes on the new form 1099-NEC:
- Box 1 reports Non-employee compensation;
- Boxes 2 and 3 reserved, no present use;
- Note the draft 2020 form 1099-NEC has a checkbox for direct sales of consumer products to a buyer, this will be removed from the final form;
- Box 4 reports federal withholding.
To review the draft instructions, please follow this link.
