How do I file 1099-NEC and 1099-MISC?

Forms 1099-MISC and 1096 changed, and the IRS added form 1099-NEC, for 2021 filing of 2020 payments

The Internal Revenue Service (IRS) changed the method for reporting non-employee compensation late in 2020. All such payments were reported on form 1099-MISC in prior years. For reporting such income in 2021 for tax year 2020, the new form 1099-NEC was introduced. Other payments, such as rent and royalties, are still reported on form 1099-MISC.

xTuple ERP supports printing 1099 forms and the accompanying form 1096. This feature can be reached in the Accounting menu: Accounting > Tax > Reports > Info for 1099. IRS guidance came too late to update the core product with the necessary changes for 2020/2021 reporting. Therefore we have created an extension package to fill the gap. This irs1099for2020 package adds the ability to print form 1099-NEC, print revised form 1099-MISC, and print revised form 1096. It also adds the ability to identify more types of payment for more accurate reporting. It can be downloaded from the xTuple Customer Portal.

The following two screenshots show the major changes added by this extension:

  • Form 1096 has fields for contact name, phone number, and email address. This person can be selected using the new 1096 Contact field.
  • The old Print 1099 button has been replaced by two buttons, one for 1099-MISC and the other for the new 1099-NEC.
  • General ledger accounts can be marked for specific purposes, just as before. The difference is that new categories have been added. The MISC category is used to calculate non-employee compensation, as it did in earlier years.