How do I change status of a person from employee to contractor?

You've come to the right place for help, @bob235. I know how you can change an employee to a contractor.

Make sure to first deactivate the employee to remove them from the list.  Let me walk you through:

1. Go to the Payroll menu and select Employees.
2. Pick the employee's name and select the pencil icon beside Employment.
3. Select Delete employee.
4. Click on Yes.

Once done, you can now add your employee as a contractor. However, this time, make their name different (from how their name appeared as an employee). You can either use Test Smith as the employee and then Test L. Smith as the contractor.

If everything is in order, here's a module you can browse about How to Add Independent Contractors And Track them for 1099s in QuickBooks Online.

Comment back if you need any more help regarding this or QuickBooks as a software. I'll make sure to back you up. Have a great start of the year!

How will this affect their numbers needed for 2022 1099?

How will changing them from Employee to contractor affect their 2022 numbers for 1099s?

Glad to see you again in this thread, @bob235. I'll share some details about how changing an employee to a contractor will affect their 2022 details for 1099s in QuickBooks Online (QBO).

If you change an employee to a contractor, you can set them up in QuickBooks and QuickBooks Contractor Payments to track all their related payments. Also, when you file their 1099s, you already have all their info. You can also expect an increase in numbers when filing the 1099s because of this time since you're dealing with contractors, unlike an employee whom you've set to a fixed calculation.

In addition, here's an article to help you determine the contractors that needs 1099s: Understand which contractors need 1099s.

You can also check this article to help you handle contractors and have them ready for 1099s: Set up contractors and track them for 1099s.

Thanks for dropping by here in the Community, @bob235. Feel free to post here again if you have any additional QuickBooks-related concerns. As always, I've got you covered, and I'll assist you. Stay safe, and enjoy the rest of the day!