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bjk
Level 2

1099-NEC

I see the article on making/moving accounts for the 1099-NEC form. I don't get it.  What am I supposed to be moving? My vendors that need 1099's are put under contractor/outside labor, landscaping, equipment repair, etc.  on my Chart of Accounts. Do I now put them under an account called 1099-NEC? If that is the case then I will have several categories just lumped into one. Thank you for any input.

18 Comments
SarahannC
Moderator

1099-NEC

Hello there, bjk.

 

Yes, you'll need to move them to the newly created 1099-NEC account in your company file. For the tax year 2020, the IRS separate the non-employee compensation into a new form, and we'll have to track the transactions separately by creating a new account for the 1099-NEC too. 

 

There are two ways to move the payments to the new 1099-NEC account. You can either create a journal entry or by opening the existing contractor payments. Here's how:

 

  1. Go to the Vendors menu and select Vendor Center.
  2. Locate the name of the vendor and double-click the transaction.
  3. Edit the account and any information that needs to be corrected.
  4. Then, Save and Close.

 

For additional detail, please check this article. Once done, you can then prepare and file your federal 1099s with QuickBooks Desktop (QBDT).

 

Let me know if you have other questions or clarification. Take care always and stay safe.

bjk
Level 2

1099-NEC

Thank you SarahannC.

So instead of my payments being broken out (currently) they are all going to be lumped under a 1099-NEC? This doesn't help in figuring Cashflow breakdown or the break out on the P&L. 

Is this new set-up just so I can have QB generate/file the 1099-NEC for me?

If so, couldn't I just skip this new set-up and file the forms manually? I hate messing up my chart of accounts. 

GlinetteC
Moderator

1099-NEC

I appreciate you for getting back to us and providing additional details, bjk.

 

You'll want to verify your vendors if they'll be reported in 1099 NEC or 1099 MISC to know who's expenses will be allocated to. Once verified, that's the time you'll have to create a Journal Entry for the new Expense account for mapping 1099 NEC. 

 

Since the mapping of the 1099 NEC and 1099 MISC needs to be of separate accounts so they won't mix up when generating the tax forms. For more information about 1099 forms in QBDT and when to file them, please check out learn what 1099 forms there are and how you can prepare for the 2020 tax season.

 

I've also added the tax year 2020 instructions for form 1099-MISC and 1099 NEC that will guide you when filing your 1099 forms in the IRS.

 

Please let me know if you have further questions about the 1099 forms in QBDT. I'll be sure to help.

Liz2021
Level 1

1099-NEC

I have done no changes which you are referring to and a small handful of vendors who have previously received 1099's through BQO are showing up as 1099-nec.  The majority do not.  Again, these are all vendors who previously had a 1099-Misc generated through QBO.  I have made no other changes and QBO has determined which vendors are NEC.  

 

Why would this small handful be in the NEC and the others are not?  To do a j/e to move them makes no sense, my P&L would not make any sense.  Please advise.

Tori B
QuickBooks Team

1099-NEC

Hey there, @Liz2021.

 

Thanks for following the thread. I'm happy to provide additional insight into the 1099 NEC.

 

You won't need to make any changes to your 1099s. Per the IRS guidelines, "You're required 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.

 

The IRS has rules to decide if a worker is an employee or a contractor. For assistance in classifying your workers, check with the IRS.
Contractors also need a 1099-MISC to file their taxes. If you have more questions about who needs to file, check with the IRS.".

 

With that being said, you won't have to make any changes, as this is how 1099s report this year. It's likely that the vendors showing 1099 NEC have payments to box 7. You can check out the articles that my colleagues have shared above for more details. 

 

Please let me know if you have further questions or concerns. You can reach out to the Community or me at any time. Take care and have a great day ahead! 

Liz2021
Level 1

1099-NEC

I fully understand this.  ANY vendor I paid in 2020 is a 1099-NEC, however only 4 are showing up as 1099-NEC on my 1099-NEC report.  I have 32 in total which have been issued 1099's in prior years and are over the IRS threshold. 

 

Why are only 4 showing up AND NOT ALL 32.  I have made no other changes, just business as usual.

eyechout
Level 2

1099-NEC

How about an example?  How do we create the 1099-NEC account?

Rea_M
QuickBooks Team

1099-NEC

I'm here to ensure you're able to create a new 1099-NEC account in QuickBooks Desktop (QBDT), @eyechout.

 

Due to the introduction of the new form (1099-NEC), you need to create a new expense account in QuickBooks to track your non-employee payments. Let's start by creating a backup of your company file for future use. Then once ready, follow these steps in creating the 1099-NEC account:

  1. Go to the Lists menu.
  2. Select Chart of Accounts.
  3. Click the Account drop-down, then choose New to create a new account.
  4. Select an account type of Expense, Other Expense, or COGS, then select Continue.
  5. Enter the Account Name and details such as DescriptionNote, and Tax-line Mapping.
  6. Select Save & Close.
  7. Repeat this process for each new account to be reported on the 1099-NEC or 1099-MISC.

 

After that, you'll have to move your payments to the new account (i.e., create a journal entry) to show them in the newly created 1099-NEC accounts. Then, run a 1099 Summary report to validate the changes. I'd recommend checking out this article's Set up QuickBooks for the 1099-NEC forms (QuickBooks Desktop) section for the step-by-step guide: How to modify your chart of accounts for your 1099-NEC filing.

 

Additionally, here's an article that'll further guide you in preparing and filing your federal 1099s: Create and file 1099s with QuickBooks Desktop. It also includes answers to the most frequently asked questions about 1099s.

 

Let me know if you have other concerns about 1099-NEC and managing non-employee transactions in QuickBooks. I'm just around to help. Take care always.

Billy49
Level 1

1099-NEC

1-20-21

I have completed all the entry.

I am using 2020 Accountants Version - Desktop (R10-29) and when I go to print it still formats and prints to the 1099MISC even though I chose the NEC.  The alignment and the preview and the printing all print to the MISC box 7, two to the page.  THERE IS NO NEC form .

 

I have downloaded all the updates.

Do we just print MISC and forgo the NEC new form?  QB is not helping!!!!!!!!!!!!!!!!

Billy49

AlexV
QuickBooks Team

1099-NEC

Thanks for joining this thread, Billy49.

 

It's possible that you're unable to print the 1099-NEC is due to a damaged file. You'll want to run the Verify and Rebuild Data in QuickBooks Desktop to fix it.

 

If this issue persists, it's best to reach out to our Customer Support Team so they can further investigate this.

  1. Go to the Help menu and select QuickBooks Desktop Help.
  2. On the pop-up, click Contact us. Enter Print 1099-NEC in the question field, then tap Let's talk.
  3. Choose how you want to contact them.

For the detailed steps, here's how to print and file 1099 in QuickBooks Desktop.

 

Keep your posts coming if you need anything else. Take care!

pwhite9279
Level 2

1099-NEC

so, all our contractors’ transactions hit our ‘subcontractor expense ‘ account , so we don’t need a new expense account right ? All ours will be NEC 

JamesDuanT
Moderator

1099-NEC

Thanks for joining in on the thread, pwhite9279.

 

If you're filing both forms (1099-MISC and 1099-NEC), we'd recommend creating separate accounts. Here's a link for reference if you need to create a new account: How to modify your chart of accounts for your 1099-MISC and 1099-NEC filing.

 

Otherwise, you can leave your chart of accounts as it is. Before changing anything, we'd suggest creating a backup copy of your company file. You can restore it if anything unusual comes up.

 

You might also find these links helpful when it come to the 1099-MISC and 1099-NEC:

Feel free to get back to us if you have additional queries regarding the 1099 process in QuickBooks.

cavallettoranches
Level 1

1099-NEC

I have one account that I use for 1099 vendors, do I still need to create a new GL #? I can't seem to get my vendors to map to NEC? Please offer any advice.

MirriamM
Moderator

1099-NEC

Hi there, cavallettoranches.

 

If the account was used for Box 7, then you'll have to create a new GL account. 

 

To create a new account:

  1. Go to the Lists menu at the top.
  2. Select Chart of Accounts.
  3. Click the Account dropdown, then choose New to create a new account.
  4. Select an account type of Expense, Other Expense, or COGS.
  5. Click Continue.
  6. Enter the Account Name and details such as DescriptionNote, and Tax-line Mapping.
  7. Select Save & Close.

Once done, record a Journal entry for the expense to transfer with the vendor's name so you can use this to map in 1099 NEC Box 1.

 

Please check out this page for more information: How to modify your chart of accounts for your 1099-MISC and 1099-NEC filing.

 

Additionally, to know what can be excluded, see What payments are excluded from a 1099-NEC and 1099-MISC?. You can also check out the 1099 E-File: QuickBooks Desktop setup, troubleshooting, & FAQs article for your reference. 

 

Leave a comment below if you have other concerns regarding the process. The Community and I will be here to help you. Have a great day.

cmatt74
Level 1

1099-NEC

There is no 1099-NEC in the mapping.  So how would you map it to catch the NEC form?

cmatt74
Level 1

1099-NEC

Finally figured it out, still not a fan of the NEC and MISC split

MASP1
Level 1

1099-NEC

If you are in California, if your 1099-NEC has only 3 copies instead of the usual 4 with the 1099-MISC you are responsible for sending a copy of the 1096 and 1099's to the Franchise Tax Board by February 1.  

 

Stoddards RSI
Level 2

1099-NEC

This is crazy, why isn't Intuit simply creating tax-line mapping that will do all of this from the standard Chart of Accounts which are affected by the new 1099 NEC regulations?  That way we can keep our expenses categorized correctly and have the mapping handle the tax form paths in the background without all the journal entries, or creating new chart of accounts that create messy bookkeeping.

 

I would like to simply go in and change the tax-line mapping to a new 1099NEC account.  Isn't that what "Mapping" is for?

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