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JustinB75
Level 2

1099 NEC and 1099 MISC

Good morning,

 

After doing quite a bit of reading about the 1099 NEC and 1099 MISC forms, I just want to make sure I have a clear understanding of who gets what form.

 

The 1099 NEC Form would go to my sub contractors who I have paid at least $600 to. I understand that part. For vendors who I paid at least $600 to for services and/or materials, do they also need one? For example, my construction company hired and paid a roofing company for a client of our's, so we paid that roofing company for of course their labor and material. Would they need a 1099 NEC form?
Another example, and question: I purchased job material from a supply company, would they need a 1099 NEC form?

 

Also from my understanding, I know that S corps and C corps don't get a 1099 MISC form, so would that mean that they also do not need a 1099 NEC form?

 

I really appreciate your time and help. I thank you in advance!

Solved
Best answer January 05, 2021

Best Answers
john-pero
Community Champion

1099 NEC and 1099 MISC

The IRS decided not enough trees were being consumed so they brought back this form.  The 1099-NEC replaces only the non-employee compensation (related to contractors and others that are not employees), and purchase of fish or payments to those that sleep with the fish (lame attorney joke from The Godfather)

 

Yearli | W-2, 1099 & 1095 Online Filing Program

 

Labor and materials is is to be included, not just labor, according to the above. And if you do pay an attorney you may have to use both forms, 1099-NEC for services and 1099 for gross proceeds that pass through their hands in purchase or sale of property, for example.  Attorneys are the only corporate entity you might have to worry about. Remember, however, that if your CPA is an LLC they still get a 1099-NEC for doing your taxes.

 

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4 Comments
john-pero
Community Champion

1099 NEC and 1099 MISC

The IRS decided not enough trees were being consumed so they brought back this form.  The 1099-NEC replaces only the non-employee compensation (related to contractors and others that are not employees), and purchase of fish or payments to those that sleep with the fish (lame attorney joke from The Godfather)

 

Yearli | W-2, 1099 & 1095 Online Filing Program

 

Labor and materials is is to be included, not just labor, according to the above. And if you do pay an attorney you may have to use both forms, 1099-NEC for services and 1099 for gross proceeds that pass through their hands in purchase or sale of property, for example.  Attorneys are the only corporate entity you might have to worry about. Remember, however, that if your CPA is an LLC they still get a 1099-NEC for doing your taxes.

 

View solution in original post

JustinB75
Level 2

1099 NEC and 1099 MISC

Thank you John!

 

So, if I purchase construction material only from a local small business supply company, would they need a 1099 NEC? I assume they would not need one since it is only material and nothing more, but I really want to be sure so I don't get penalized.

And if they are a C corp or S Corp, they do not receive either form, correct?

 

Thank you again!

LeeDee
Level 1

1099 NEC and 1099 MISC

I'm having difficulty filling in the Payer/State ID information to efile a 1099NEC. I keep getting rejected with a notice: Invalid State ID Number for _______________ - Expected 12 digits.

 

I thought the State ID or Corporation ID from the State was all I needed for this, but apparently not. This is my brick wall and can not get my forms e-filed due to this. Any feedback would be greatly appreciated.

 

 

BettyJaneB
QuickBooks Team

1099 NEC and 1099 MISC

I'd like to ensure that you can E-file your 1099-NEC form successfully. @LeeDee.

 

Let me get you pointed in the right direction to help verify your State ID number so you can enter it on the 1099 form.

 

The digits on the State ID number depends on the state's requirement. If you're living in New Jersey, your ID should be 12 digits.

 

In your case, I recommend reaching out to your state agency to verify this matter. This way, you'll be able to manually enter them on the form upon filing it.

 

Here's where you can key in the ID number:

  1. Go to Edit.
  2. Select Preferences.
  3. Choose Tax: 1099.
  4. Under the Company Preferences tab, select click here from the option asking If you're ready to prepare your 1099s.
  5. Click Get Started.
  6. Hit Continue.
  7. Choose whether you manually or electronically file your 1099s.
  8. Click Save & Close.

Once done, you can now prepare and file your 1099 Misc form including your state ID number.

 

For your reference, I've included a screenshot below and a guide in preparing and filing your 1099 Misc form.

 

 

Please let me know if you need clarification about this, or there's anything else I can do for you. I'll be standing by for your response. Have a great day.

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