Update: IRS Form 1099-MISC Undergoes Changes For 2022-23 Tax Year

After nearly two years, Form 1099-MISC gets yet another update from the IRS. Tax1099 details what to look out for and how to be prepared for the upcoming filing season.

Form 1099-MISC is one of the most widely-filed 1099 forms during the tax season. It is currently used to report miscellaneous information, such as payments made to attorneys, rents, royalty, cash payments, and other compensations. 

A lot of changes were made to Form 1099-MISC, particularly, in 2020. The IRS removed the reporting of nonemployee compensation on box 7, and instead required filers to report it on Form 1099-NEC.

Beginning with the 2022 reporting season, there are some additional changes that will be made to 1099-MISC. We outline what must be reported on Form 1099-MISC, what changes were made, and how you can be prepared.

Form 1099-MISC: An Overview

Form 1099-MISC is used to report payments made to attorneys, rents, royalty, cash payments for fish, and other miscellaneous payments.

Before 2020, payments made to freelancers and contractors had been lumped together in Box 7 under the “miscellaneous income” category.

Changes from the IRS prompted payers to separately report those workers under Form 1099-NEC (non-employee compensation).

The IRS is making changes to the 1099-MISC Form, again for the 2022 filing season, but thankfully, the changes are relatively more subtle compared to the previous revisions. 

Let’s learn about them in detail.

What Are The Latest Changes To Form 1099-MISC For 2022-23 Tax Year?

The specific changes to 1099-MISC are as follows: 

Box 13: Changed from “Excess golden parachute payments” to “FATCA Filing Requirements” checkbox

Box 14: Changed from “Nonqualified deferred compensation” amount to “Excess golden parachute payments”

Box 15: Changed from “State tax withheld” to “Nonqualified deferred compensation” 

Box 16: Changed from “State/Payer’s State No.” to “State tax withheld”

Box 17: Changed from “State Income” to “State/Payer’s State No.” 

Box 18: Added to report “State Income” amount

How Can You Be Prepared? 

Don’t wait for tax season to come around! Be informed on what’s to come and the implications of these changes on your business and filing, so that no surprises await you.

Know the requirements

For Form 1099-MISC, as the payer, you must report payments over $600 for Rents, Awards/Prizes, Medical/Health Care, Crop Insurance Proceeds, and various others including attorney fees and direct sales of consumer products, made to resellers. 

The IRS has the full details of the form 1099-MISC listed here on their site. 

Form 1099-NEC must be filed for each independent contractor or payee to whom you’ve paid at least $600 or more as non-employee compensations.

For more insight and comparisons with other forms, check our previous blog post: 

Form 1099 K vs 1099 MISC vs 1099 NEC – What’s The Difference?

How We Can Help

Being prepared for changes this tax season doesn’t have to be daunting. 

With Tax1099, businesses can:

• Onboard vendor data with our W9 Manager and validate their TINs using Tax1099’s Real-Time TIN Matching ahead of the filing season. 

• Export your 1099 reports seamlessly from your preferred accounting software to Tax1099 or use one of our popular accounting integrations like Tipalti, QuickBooks Desktop, Sage Intacct, and countless others. 

• Use our Scheduled eFiling feature to schedule your filings before the IRS deadlines. You can select a date or allow Tax1099 to select a scheduled date to submit your 1099 returns automatically. 

For businesses who are considered Payers under form 1099 NEC, you will need the independent contractor’s information. This includes name, address, and EIN or Social Security number. 

Failure to accurately report this information before the filing date will result in penalties that can accrue and gain interest. 

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• IRS TIN & Name Match
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For more information on changes to informational forms ahead of tax season, follow our blog. 

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