1099-NEC: Use For
- Non Employee Compensation for Independent Contractors of $600 or more
- Someone who is not an employee, who provided services
- Can go to an individual, parternship, estate, or corporation
- Should inlcude payments for services AND payments for parts or materials used to perform the services
Examples: Attorneys, Architects, Accountants, Graphic Designer, Web Developer, IT consultant, freelance writer, non-employee sales commissions, freelance contractors, benefits consultant and directors’ fees.
Filing Due Date: 1/31/2021
1099-MISC: Use For
Royalties, Rents, Prizes and Awards, Other Income Payments, Medical and healthcare payments, etc.
Filing Due Date: 2/28/2021
See IRS Form 1099-MISC and Form 1099-NEC Instructions for more details.
The New Form 1099-NEC Summarized
In case you have not heard: The IRS has revived Form 1099-NEC, which was last used in 1982. This form will be used in 2021 to report 2020 non-employee compensation. Corresponding changes were made to the 1099-MISC form.