1099-NEC

AMW13 · ‎January 23, 2024

We had a contract laborer that I owed for December. I entered a bill for contract labor, and paid it this month. That amount isn’t showing up on either the 2023 or 2024 report for 1099s. Should non-employee compensation be reported the year it’s earned or paid?

KimberlyS · ‎January 24, 2024

I appreciate you getting back in the thread, AMW13.

I'll add some information regarding the 1099-NEC.

As my colleague said, only payments made via third-party systems are excluded from the 1099-NEC calculations as they'll be reported by financial institutions.

Hence, you'll need to file a form 1099-NEC if you pay the bill through a check and if they meet the filing criteria. This is similar to services paid via cash and ACH (including direct deposit).

On the other hand, please verify if the check and vendor in that specific bill qualified for the 1099 filing criteria. This can be the reason why the payment wasn't reflected on the report.

To learn more about the 1099-NEC, visit this article: Understand which payments are excluded from a 1099-NEC and 1099-MISC.

You might want to review these resources to help you prepare and file your federal 1099s:

Keep me updated in the thread if you have additional questions about 1099-NEC or other related concerns in QuickBooks Desktop. I'll be around to lend a hand.

View solution in original post

CamelleT · ‎January 23, 2024

I know the possible reason why your payment didn't show up on either the 2023 or 2024 report for 1099s, AMW13.

May I know what payment method you used in paying? Since certain payments are excluded from the 1099-NEC form. It could be the reason why your payment didn't show up. These are payments made via credit card, debit card, or third-party system, such as Paypal, because your financial institution reports these payments, so you don't have to.

Regarding your other question, 1099s are calculated according to the payment date, not when a bill is created. This rule applies no matter what accounting method (cash or accrual) your customer uses.

Additionally, check out this article to help add contractors or change an amount in your 1099s: Troubleshoot missing contractors or wrong amounts on 1099s.

I'm still all ears if you have further questions about your 1099-NEC form. Comment below,and I'll get back to help you. Have a nice day!

Rainflurry · ‎January 24, 2024

@AMW13

The year its paid. Per the IRS 1099-NEC instructions:

File Form 1099-NEC, Nonemployee Compensation, for each person in the course of your business to whom you have paid the following during the year...

AMW13 · ‎January 24, 2024

Thank you! I paid the bill with a check.

KimberlyS · ‎January 24, 2024

I appreciate you getting back in the thread, AMW13.

I'll add some information regarding the 1099-NEC.

As my colleague said, only payments made via third-party systems are excluded from the 1099-NEC calculations as they'll be reported by financial institutions.

Hence, you'll need to file a form 1099-NEC if you pay the bill through a check and if they meet the filing criteria. This is similar to services paid via cash and ACH (including direct deposit).

On the other hand, please verify if the check and vendor in that specific bill qualified for the 1099 filing criteria. This can be the reason why the payment wasn't reflected on the report.

To learn more about the 1099-NEC, visit this article: Understand which payments are excluded from a 1099-NEC and 1099-MISC.

You might want to review these resources to help you prepare and file your federal 1099s:

Keep me updated in the thread if you have additional questions about 1099-NEC or other related concerns in QuickBooks Desktop. I'll be around to lend a hand.

BigRedConsulting · ‎January 25, 2024

@AMW13

RE: Should non-employee compensation be reported the year it’s earned or paid?

The year it's paid.

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