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Level 1

Can I still use 1099-MISC rather than 1099-NEC for independent contractor payment reporting if no taxes were withheld?

 
3 Comments
QuickBooks Team

Can I still use 1099-MISC rather than 1099-NEC for independent contractor payment reporting if no taxes were withheld?

Hi there, @jmorrissey

 

I'll share with you some information about the independent contractor's form in QuickBooks Online. 

 

You use 1099-NEC if you paid the contractor $600 or more in the previous year. Also, contractors, you've withheld any federal income tax from under the backup withholding rules. On the other hand, 1099-MISC is only required $600 or more in the past year. 

 

For more insight about this matter, check out this article: What is 1099, and do I need to file one?

 

Since the independent contractor's don't have taxes withheld, I'd suggest using the 1099-MISC. Before submitting the form, it would still be best to consult with your accountant or IRS to help determine the appropriate forms to use. This is to make sure what's best for you and your business.

 

Also, please visit this article to know more about what states not required to file Form 1099-MISC: Does my state need Form 1099-MISC to be filed?.

 

Once you've confirmed, you can now prepare and file the forms. For the complete directions, visit this article: Instructions for Forms 1099-MISC and 1099-NEC.

 

Additionally, please browse through these articles to know how to fix if the form submits incorrectly. 

 

 

Let me know if you have follow-up questions. I'm always here, ready to help.

Level 1

Can I still use 1099-MISC rather than 1099-NEC for independent contractor payment reporting if no taxes were withheld?

Thank you for replying. I'm trying to avoid having to update my chart of accounts for the new 1099-NEC. Our reporting has been with the 1099-MISC using Box 7 (non-employee compensation). It seems there is still an option to use 1099-MISC Box 3 (Other Income). BUT, looking at my vendors' setup in my version of QB, there is only a box to check for tracking for 1099 (no specific account in the chart to identify).

I've read the instruction on updating and find them confusing. Specifically, I don't understand what the 'new' account is. Is it for the taxes withheld?

I ran a 1099 Transaction Detail Report in several ways with the following results:
ALL YEARS: 1099 BOX shows 'OTHER INCOME' for all vendors
YEAR 2018: 1099 BOX shows 'OTHER INCOME' for all vendors
YEAR 2019: 1099 BOX shows 'NEC' for all vendors
YEAR 2020: 1099 BOX shows 'OTHER INCOME' for all vendors
Due to these discrepancies, I'm totally confused as to what to do (whether I need to even do anything). I believe I need to try to talk to a QB help person.
Joy Morrissey

QuickBooks Team

Can I still use 1099-MISC rather than 1099-NEC for independent contractor payment reporting if no taxes were withheld?

Thanks for the information that you gave, @jmorrissey.

 

I can get you pointed in the right direction to help ensure that the tracking of your 1099 transactions are accurate to get this issue sorted out.


When recording 1099 transactions in the system, you'll need to make sure that 1099 MISC and 1099 NEC must have a separate expense account. They should not be mapped on the same expense account to avoid reporting the same vendor in both 1099 forms.

 

However, to help you with reviewing and fixing your transactions, I suggest contacting our Customer Care Team. They'll be able to run a remote-viewing session to isolate this matter.

 

You can reach them by following these steps below:

  1. Click on Help at the top menu bar.
  2. Hit on the Contact Us button.
  3. Enter a brief description of the issue in the What can we help you with? box.
  4. Press on Let's talk.
  5. Select on Get a callback.
  6. Key in your contact details, then tap on Confirm my call.

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For your reference, I'm also adding here a link that you can visit to give you more details about which payments should be excluded from the 1099-MISC and 1099-NEC form: What payments are excluded from a 1099-NEC and 1099-MISC?

 

Know that you can always visit us here in the Community if you have any other questions. I'd be pleased to assist you. Have a lovely day!

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