Alabama to Require 1099-NEC Reporting Beginning in Tax Year 2020

Paul Ogawa
February 1, 2021

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.

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Paul Ogawa

Paul Ogawa is a Senior Regulatory Counsel at Sovos Compliance. As part of the Regulatory Analysis team, his main areas of focus are state and federal tax withholding, the Affordable Care Act (ACA), and Canadian tax information reporting. Prior to Sovos, Paul worked as a litigation attorney in Boston area law firms, representing clients in insurance subrogation claims, family law matters, and employment disputes. Paul is a member of the Massachusetts Bar, earned his B.A. from Brandeis University and his J.D. from the Suffolk University Law School.
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