Learn about the new updates to Form 1099-NEC, how it affects your state and federal filing processes, and the best way to eFile Form 1099-NEC online easily.
In mid-September of 2021, the IRS published a revised version of the 1120 publication, which now provides clarity into the filing requirements of the IRS Form 1099-NEC, along with other business tax series.
The revised publication explicitly details that Form 1099-NEC, non-employee compensations, is now included in the Combined Federal/State Filing Program. This news comes as a huge relief to the taxpayers as Form 1099-NEC can now be directly submitted through state filing programs.
Form 1099-NEC: New Update
With this update, the IRS plans to enable a simplified filing process for taxpayers and regulate the state tax departments to record and report state-specific data pertaining to the 1099-NEC reports submitted by the taxpayers.
This update comes after taxpayers struggled to file directly with the federal agency with limited scope for paper filing and restrictions on electronic filing for the newly-introduced form.
The new update from the federal agency aims to bridge the gaps in reporting and streamlining the state and federal reporting experiences for taxpayers.
IRS Form 1099-NEC: State Filing Requirements
Previously, Form 1099-NEC was not included in the CF/SF program. Many states did not have any state withholding to report to begin with. However, the lack of guidance on the Form 1099-NEC and the insufficient filing instructions provided for the form left millions of taxpayers conflicted.
Now that the CF/SF program includes Form 1099-NEC, taxpayers need to look out for new filing requirements issued by the states. This is to ensure that the returns report accurate information and filed per the directives of state tax departments with comprehensive reporting guidelines.
If you’re looking for state-specific filing requirements for 1099-NEC, keep checking this space for updates.
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