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jmorrissey
Level 1

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

 
9 Comments 9
MichelleBh
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.

jmorrissey
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

BettyJaneB
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!

pagebypage
Level 1

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

I had no idea there was a new NEC form. I already filed them as MISC. Is that a big deal? Do I need to file correction forms and start all over again? What a pain!

ChristieAnn
QuickBooks Team

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

Welcome to QuickBooks Community, pagebypage. I'll provide first a piece of information about what is the difference between 1099-NEC and1099-MISC. This way, you can identify if you'll need to make corrections to your tax forms.

 

You're obliged by U.S. tax law to file a Form 1099-NEC for anyone that you paid $600 or more in the previous year. You’ll also need to file a Form 1099-NEC for any person you’ve withheld any federal income tax from under the backup withholding rules. This can be contractors, freelancers, vendors, or any other non-employee. If you have previously reported any information on Box 7, which is the total amount of non-employee compensation, this information is now reported on the 1099-NEC.

 

You're required by U.S. tax law to file a 1099-MISC form for anyone that you paid $600 or more in the previous year. Unlike the 1099-NEC, the payments found on a 1099-MISC are geared towards vendors, attorneys, and other individuals who are not a proper contractor.

 

Based on the information above, if your vendors fall as 1099-MISC, it's not a big deal. That said, filing corrections and start all over again is not necessary. However, if your vendors drop as 1099-NEC, you'll need to file correction forms from 1099-MISC to 1099-NEC, so filing taxes stays accurate. To see the details on how to perform the steps, you can refer to this article: How to correct or change 1099s in QuickBooks.

 

Please click this article to see different information about box numbers on Forms 1099-NEC and 1099-MISC for reporting certain income: Understanding payment categories for the 1099-MISC and 1099-NEC.

 

Visit us here again if you have other questions about filling tax forms in QuickBooks. I'm always here to help.

sfaw
Level 1

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

I've seen this posted serveral times. Both paragraphs start with the sentence if you paid more than $600 the previous year. I used quickbooks it says its supposed to do the correct 1099. It used 1099 misc. These are contractors that I didnt withhold taxes on that made more than $600. Do I need to do corrections for all these to change to 1099-NEC or not?

DivinaMercy_N
QuickBooks Team

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

I've got your back, @sfaw.

 

Let's first review your data to learn which 1099 forms you can prepare. For the detailed info, please see this article: What is 1099, and do I need to file one? 

 

Once done reviewing, you have to directly amend to the IRS if you need correction. Head to the How to correct or change 1099s page at this link for the detailed guide. When corrected, you'll now need to provide the corrected return to the recipient or contractor yourself.

 

Also, QBO offers several payroll reports that you can pull up to access your business and employee information. To get started, see our Payroll reports page.

 

If you need further assistance processing 1099s in QuickBooks, feel free to leave a reply below. I'm always here to help. Have a good one. 

jsweaver
Level 1

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

If I received a 1099-misc instead of a 1099-nec, which would have been the correct form, will I get penalized or my refund delayed if I use that 1099-misc when I do my taxes?  My 'non-employer' sent me a 1099-misc instead of the 1099-nec and doesn't want to fix it.  Will that impact me when I file?

Rose-A
Moderator

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

Hey there, jsweaver. I'd be pleased to help point you in the right direction who can guide you with filing the correct 1099 form in QuickBooks Online.

 

To be able to use the correct form without being penalized or refund delayed, I'd suggest getting in touch with IRS as they can provide accurate details in terms of filing the 1099s.

 

To know the state requirements in filing 1099s in QuickBooks Online, check out this article: Do I need to file 1099 forms with my state? It contains more details on what state doesn't require to file Forms 1099-NEC and 1099-MISC.

 

Additionally, you can read through this article to know more about the new 1099-NEC form as well as a link on how to file them: Understanding payment categories for the 1099-MISC and 1099-NEC.

 

If you still need help with 1099-NEC or need further assistance with QuickBooks forms, please let me know. I'll be here to keep helping. Have a great rest of your day!

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