This year, the IRS reintroduced Form 1099-NEC as the way to report nonemployee compensation, moving away from Form 1099-MISC as traditionally had been used. Let’s take a look at this new requirement and more importantly, how to record and report 1099-NEC information in Sage 100.
What is Form 1099-NEC?
Before it’s reintroduction this year, Form 1099-NEC was actually an old form that hadn’t been in use since 1982. For decades now, businesses have filed Form 1099-MISC to report nonemployee compensation (i.e. payments to independent contractors).
But according to the IRS, in order to help clarify the various filing deadlines for different types of payments that could be included on Form 1099-MISC, they decided to reintroduce Form 1099-NEC specifically for nonemployee compensation which has a single filing deadline.
See Also: New 1099-NEC features released in Sage 100 Version 2021
IRS instructions explain that you must report nonemployee compensation payments on 1099-NEC that meet the following four conditions:
1. The payment is made to someone who is not your employee
2. The payment is made for services in the course of your trade or business
3. The payment is made to an individual, partnership, estate, or corporation
4. The payment total is at least $600 for the year
But according to the IRS, in order to help clarify the various filing deadlines for different types of payments that could be included on Form 1099-MISC, they decided to reintroduce Form 1099-NEC specifically for nonemployee compensation which has a single filing deadline.
See Also: New 1099-NEC features released in Sage 100 Version 2021
IRS instructions explain that you must report nonemployee compensation payments on 1099-NEC that meet the following four conditions:
1. The payment is made to someone who is not your employee
2. The payment is made for services in the course of your trade or business
3. The payment is made to an individual, partnership, estate, or corporation
4. The payment total is at least $600 for the year
Managing 1099-NEC in Sage 100
The ability to record 1099-NEC was released in Sage 100 Versions 2020.0, 2019.3, 2018.9. This provided code to update to the correct 1099-NEC boxes and use a utility to move the 1099-MISC values already recorded for year 2020 to 1099-NEC as needed. The utility is only to be used if 2020 1099-MISC boxes were already populated and need to be moved to year 2020 1099-NEC.
More guidance on using the utility
The ability to report 1099-NEC changes was released in Sage 100 Versions 2020.1, 2019.4, and 2018.10. This provided the code to map to the Aatrix Reporting application.
Finally, the ability to print and submit forms electronically will be released by Aatrix in their Year-End product update which is typically released in mid-December. Until that time, you may receive error messages when attempting to print 1099-NEC for year 2020.
Refer to this Sage Support Knowledgebase article for full details and additional resources.
See Also: Sage 100 Tips & Tricks
More guidance on using the utility
The ability to report 1099-NEC changes was released in Sage 100 Versions 2020.1, 2019.4, and 2018.10. This provided the code to map to the Aatrix Reporting application.
Finally, the ability to print and submit forms electronically will be released by Aatrix in their Year-End product update which is typically released in mid-December. Until that time, you may receive error messages when attempting to print 1099-NEC for year 2020.
Refer to this Sage Support Knowledgebase article for full details and additional resources.
See Also: Sage 100 Tips & Tricks
