Here’s a quick state-wise guide to check and understand the reporting requirements for Form 1099-NEC + official notifications from all 50 states.
Business taxpayers are used to convenience tax filing procedures and programs enforced by the IRS and state tax departments. A new form, 1099-NEC has been recently reintroduced in 2020 for the tax year 2020-2021, and it must be used by business taxpayers henceforth every tax year unless otherwise specified.
Even though this relatively new form has been reintroduced to curb corrupt practices in the country, taxpayers are finding it hard to comply with.
Not only is the reintroduction of 1099-NEC adding an extra step to the current 1099 tax filing process, but it’s also not a part of the Combined Federal/State Filing (CF/SF) program.
This complicates the informational filing procedure for businesses because taxpayers have to prepare and file the forms according to the guidelines issued by each state.
Further, both the principal location of the business and the operational location from which the business is earning its incomes are considered. This rule would vary according to each state.
Here’s an example to understand the situation.
Let’s say that you are a business owner who is operating a clothing store in Texas. You are making enough sales to generate income through this business or trade. So, the income that you have earned from this store in Texas is taxable.
Sounds pretty easy, right?
Now, let’s say that you have expanded your business and have multiple outlets in various states. Say, California, New York, Massachusetts, and Michigan. Now, you not only have to pay taxes for the income earned in Texas (the principal location in which your business is situated), but also for the income earned in California, New York, Massachusetts, and Michigan (operational states).
Sounds fair, doesn’t it?
Except, the guidelines for reporting taxes owed will change according to each state for Form 1099-NEC.
The IRS has not specified if businesses should pay taxes according to the above rule or new rules, and left the matter to the state tax and revenue departments to advise their taxpayers.
So, as a business taxpayer, it’s your responsibility to check the state reporting and compliance guidelines for each state before you report and file your 1099 forms.
Fortunately, we could get on the case and created this quick guide to give you an overview of how each state has advised its taxpayers to report 1099-NEC forms.
So, let’s get to it.
State-Wise 1099-NEC Guidelines
Note: Please note that 1099-NEC reporting guidelines for Washington and D.C. will vary.
1099-NEC Reporting Requirements For Alabama
Taxpayers must file 1099-NEC to the Alabama Department of Revenue. The guidelines for business tax filing remain the same for the tax year 2020-2021 for all business taxpayers.
1099-NEC Reporting Requirements For Alaska
Alaska does not have a state income tax. So, taxpayers don’t have to file 1099-NEC in Alaska.
1099-NEC Reporting Requirements For Arizona
Taxpayers are required to file Form 1099-NEC only if the state withholding is reported in the forms. You can start filing 1099-NEC forms to the Arizona -Department of Revenue.
1099-NEC Reporting Requirements For Arkansas
Taxpayers must file their 1099-NEC forms to the Arkansas Department of Finance and Administration. If payments amount to $2500 or more, then taxpayers are required to report the same in their 1099-NEC forms.
1099-NEC Reporting Requirements For California
Taxpayers are required to file their 1099-NEC forms with the California Franchise Tax Board when payments are made in full or part to a resident of the state or when a transaction took place within the state.
1099-NEC Reporting Requirements For Colorado
Taxpayers are required to file their 1099-NEC forms to the Colorado Department of Revenue only if the state withholding is reported. Colorado has started accepting electronic filings on 15th January 2021. Further, if you are sending your 1099-NEC files by email, then make sure that the file size is not larger than 20 MB. Please note that files by email are unencrypted by default.
1099-NEC Reporting Requirements For Connecticut
Taxpayers are required to file their 1099- NEC forms with the Connecticut Department of Revenue only if the form is issued to a resident of the state or if the transaction took place within the state. If you are filing electronically, ensure that you specify your Connecticut Tax Registration Number.
1099-NEC Reporting Requirements For Delaware
Taxpayers are required to file Form 1099-NEC to the Delaware Department of Finance when a resident of the state is issued the form (regardless of the place in which the transaction took place). Further, 1099-NEC must be filed if the form has been issued to a non-resident who performed the work in Delaware.
1099-NEC Reporting Requirements For D.C.
Taxpayers are required to file 1099-NEC forms to the District of Columbia Department of Finance & Revenue when the payments reported amount to $600 or more annually. For electronic filing specifications in D.C. check this downloadable PDF link.
1099-NEC Reporting Requirements For Florida
Taxpayers are not required to file 1099-NEC forms since there is no state income tax in Florida.
1099-NEC Reporting Requirements For Georgia
Taxpayers are required to file 1099-NEC forms to the Georgia State Revenue Commissioner only if state withholding is reported.
1099-NEC Reporting Requirements For Hawaii
Taxpayers are required to file 1099-NEC forms to the Hawaii Department of Taxation. The state has confirmed that it will accept 1099-NEC files when:
- Taxpayers engage in a trade or business within the state
- Taxpayers have a place of business or a fiscal office in Hawaii
- Taxpayers make payments to recipients in the course of business or trade
Additionally, if filers are filing by paper, they are required to directly file 1099-NEC forms to the Department of Taxation, which means that taxpayers must opt paper filing method.
Note: Form N-196 must also be filed along with Form 1099-NEC when paper filing.
Reporting state ID on Form N-196 is not compulsory.
1099-NEC Reporting Requirements For Idaho
Taxpayers are required to file 1099-NEC forms to the Idaho State Tax Commission only if state withholdings are reported. Electronic filings will require a valid and active federal employer identification number and Idaho Withholding Account Number (state ID).
1099-NEC Reporting Requirements For Illinois
Taxpayers are not required to file Form 1099-NEC. For live updates, check the official Illinois Department of Revenue’s portal.
1099-NEC Reporting Requirements For Indiana
Taxpayers are required to directly file Form 1099-NEC to the Indiana Department of Revenue only if state withholdings are reported. If the forms don’t report state withholdings, taxpayers are required to have the forms available when requested by the Indiana Department of Revenue.
Check this downloadable PDF to view the specifications and guidelines for Form 1099-NEC.
1099-NEC Reporting Requirements For Iowa
Taxpayers are required to file Form 1099-NEC to the Iowa Department of Revenue & Finance only if state withholdings are reported on the form. State IDs are mandatory for both methods of filing. Additionally, filers are required to have the forms available (for at least 4 years) if and when requested by the Iowa Department of Revenue & Finance.
Electronic filers (payers/employers) are assigned BEN (Business Tax Entity) when registering with the department to withhold state tax. A BEN must be used by filers to log into Iowa’s eFile and Pay portal.
- Check this link to understand the guidelines to obtain a BEN and specifications on bulk e-files.
- Check this downloadable PDF for updates, specifications, and guidelines on Form W-2 and 1099 reporting in Iowa.
1099-NEC Reporting Requirements For Kansas
Taxpayers are required to file their 1099-NEC forms with the Kansas Department of Revenue.
Check this downloadable PDF to review the specifications for Form 1099-NEC
The Kansas Department of Revenue does not mandate reporting state IDs in the forms. However, we recommend checking this link to further understand the instructions and State ID requirements.
1099-NEC Reporting Requirements For Kentucky
Taxpayers are required to file Form 1099-NEC with the Kentucky Revenue Cabinet only if the forms report state withholding. A State ID is mandatory when filing Form 1099-NEC.
1099-NEC Reporting Requirements For Louisiana
Louisiana is yet to declare the reporting instructions and requirements for Form 1099-NEC. There are no new updates regarding Form 1099-NEC in the official portal of the Louisiana Department of Revenue. We encourage you to check the portal before you start filling your forms.
If the state does not provide any new updates, the filing requirements for Form 1099-MISC will be followed by default for Form 1099-NEC as well.
The Louisiana Department of Revenue requires taxpayers to file 1099-MISC if the following conditions are met.
- Payments amounting to $1,000 or more
- Payments made to non-residents of Louisiana
- Paid rents or royalties from properties located in Louisiana
1099-NEC Reporting Requirements For Maine
Maine is yet to declare 1099-NEC requirements. Given Maine’s history with 1099-MISC reporting, wherein the state does not require its taxpayers to file Form 1099-MISC unless the form reports state withholding, any new update from Maine seems unlikely.
However, if Maine decides to declare its 1099 reporting requirements, Form 1099-NEC has to be filed with the Maine Revenue Services as specified in the official portal.
1099-NEC Reporting Requirements For Maryland
Taxpayers are required to file Form 1099-NIC with the Comptroller of Maryland only if the forms report state withholding greater than $0.
Filers are required to have a Maryland Central Registration Number and State IDs when reporting with Form 1099-NEC.
- Check Maryland 1099 specifications here
1099-NEC Reporting Requirements For Massachusetts
Taxpayers are required to file Form 1099-NEC to the Massachusetts Department of Revenue. The state did not provide any new directions for the form but encourages filers to follow the federal guidelines as instructed by the IRS.
Take a look at this guide from the Massachusetts Department of Revenue before you start preparing your forms.
1099-NEC Reporting Requirements For Michigan
Taxpayers are required to file 1099-NEC forms to the Michigan Department of Treasury if the following conditions are met.
- Services are performed within the state
- State tax withheld
State ID is not mandatory.
- Check the complete guide to tax withholding in Michigan here
1099-NEC Reporting Requirements For Minnesota
Taxpayers are required to file Form 1099-NEC with the Minnesota Department of Revenue only if the forms report state withholding.
Useful Links
- Official guide for filing W-2 and 1099 forms in Minnesota – All Taxpayers
- Official guide for filing W-2 and 1099 forms in Minnesota – Employers
1099-NEC Reporting Requirements For Mississippi
Taxpayers are required to file form 1099-NEC to the Mississippi State Department of Revenue. The state has not provided any specific guidelines for the State ID positioning.
1099-NEC Reporting Requirements For Missouri
Taxpayers are required to file Form 1099-NEC to the Missouri Department of Revenue only if the payments made annually amount to $1200 or more.
Missouri does not mandate the inclusion of State ID in Form 1099-NEC or any of the 1099 forms issued to the state.
1099-NEC Reporting Requirements For Montana
Taxpayers are required to file Form 1099-NEC to the Montana Department of Revenue. Montana requires the direct filing of Form 1099-NEC if the non-employee compensations made annually amount to $600 or more. State IDs are not mandatory when filing.
1099-NEC Reporting Requirements For Nebraska
Taxpayers are required to file their 1099-NEC forms to the Nebraska Department of Revenue only if the state withholding and incomes earned in the state are reported. Filers are required to have a state employer identification number when filing their 1099s electronically with the Nebraska Department of Revenue.
1099-NEC Reporting Requirements For Nevada
Taxpayers are not required to file Form 1099-NEC since there is no state income tax in Nevada.
1099-NEC Reporting Requirements For New Hampshire
Taxpayers are not required to file Form 1099-NEC since there is no state income tax in New Hampshire.
1099-NEC Reporting Requirements For New Jersey
Taxpayers are required to file Form 1099-NEC if the reported payments amount to $1000 or more in a tax year. Further, taxpayers are required to file this form if it reports state withholding. Form 1099-NEC must be filed with the New Jersey Department of the Treasury.
1099-NEC Reporting Requirements For New Mexico
New Mexico is yet to declare the 1099-NEC guidelines for the 2020-2021 tax year. New Mexico’s tax guidelines history, however, tells us that 1099-MISC was not required for filing unless the form reports payments derived from oil and gas production within the state.
1099-NEC Reporting Requirements For New York
Taxpayers are not required to file Form 1099-NEC with the New York Department of Taxation & Finance.
1099-NEC Reporting Requirements For North Carolina
Taxpayers are required to file Form 1099-NEC with the North Carolina Department of Revenue only if state withholding is reported in the form. “State Withholding Account Number” or “NC Withholding ID Number” is required when filing with either paper or electronic formats.
1099-NEC Reporting Requirements For North Dakota
North Dakota is yet to declare any new requirements or guidelines in regards to Form 1099-NEC. If there is a filing requirement, the North Dakota Tax Commissioner will update it in the official portal.
1099-NEC Reporting Requirements For Ohio
Taxpayers are not required to file Form 1099-NEC with the Ohio Department of Taxation. However, if state income tax withholding is reported, then taxpayers are required to file Form 1099-NEC.
1099-NEC Reporting Requirements For Oklahoma
Taxpayers are required to file Form 1099-NEC to the Oklahoma Tax Commission. Payments (greater than $750) made to residents and non-residents of Oklahoma, and payments made within the state must be reported in the form. Please note Ohio requires Form 501 to be filed along with Form 1099-NEC. If filing electronically, filers need to have a state ID or Withholding Account ID.
1099-NEC Reporting Requirements For Oregon
Taxpayers are required to file Form 1099-NEC to the Oregon Department of Revenue. Please note that taxpayers are required to have a Business Identification Number (BIN) (issued in Oregon) when filing 1099 forms with the state.
1099-NEC Reporting Requirements For Pennsylvania
Taxpayers are required to file Form 1099-NEC with the Pennsylvania Department of Revenue. The form must report transactions made by residents of Pennsylvania or transactions made by non-residents within Pennsylvania. Please note Pennsylvania requires filers to report State Withholding Identification Number on all 1099 forms issued to the state.
Official Handbook For W2 and 1099 Reporting & Specifications
1099-NEC Reporting Requirements For Rhode Island
Rhode Island is yet to declare its 1099-NEC reporting requirements. However, given the state’s history with 1099 reporting guidelines, 1099-NEC would also be required to be filed with the same instructions should the state declare the requirement.
Rhode Island Division of Taxation usually requires 1099 reporting in the following cases.
1) State income tax was withheld
2) Amount paid to residents derived from the income attributable to the obligations of other states.
3) Payments to non-residents for services performed within the state
4) Qualified depository accepting deposits as family education accounts
Note: Please note that Rhode Island accepts only paper filings.
1099-NEC Reporting Requirements For South Carolina
Taxpayers are required to file Form 1099-NEC with the South Carolina Department of Revenue only if backup withholding is reported. Please note that the state requires filers to provide South Carolina Withholding Number issued by the state.
1099-NEC Reporting Requirements For South Dakota
South Dakota does not require 1099-NEC filing as there is no state income tax in South Dakota.
1099-NEC Reporting Requirements For Tennessee
Tennessee does not require 1099-NEC filing as there is no state income tax in Tennessee.
1099-NEC Reporting Requirements For Texas
Texas does not require 1099-NEC filing as there is no state income tax in Texas.
1099-NEC Reporting Requirements For Utah
Taxpayers are required to file Form 1099-NEC along with other 1099 forms to the Utah Tax Commission only if backup withholding is reported in the form. Utah now accepts electronic filings.
Please note that Utah requires a Utah Withholding Account Identification Number when filing 1099 forms. Utah’s 1099 reporting guidelines apply to Form 1099-NEC as well.
1099-NEC Reporting Requirements For Vermont
Taxpayers are required to file Form 1099-NEC along with Form WH-434 to the Vermont Department of Taxes.
Taxpayers need to file Form WH-434 only if any of the following apply.
- The payment was subject to Vermont withholding
- The payment was made to a non-resident of Vermont for services performed in Vermont
1099-NEC Reporting Requirements For Virginia
Virginia does not require 1099-NEC filing. However, if backup withholding is reported, Form 1099-NEC has to be filed with the Virginia Department of Taxation.
1099-NEC Reporting Requirements For Washington
Washington does not require 1099-NEC filing as there is no state income tax in Washington.
1099-NEC Reporting Requirements For West Virginia
Taxpayers are required to file Form 1099-NEC only if state withholding is reported. The West Virginia Department of Tax & Revenue requires Form IT-103 to be submitted along with Form 1099-NEC at the time of submission.
- Official Guidelines For 1099 Reporting In West Virginia
- Official Guidelines For W-2 Reporting In West Virginia
1099-NEC Reporting Requirements For Wisconsin
Taxpayers are required to file Form 1099-NEC to the Wisconsin Department of Revenue. Filers are required to provide Wisconsin Withholding Tax Account Number when filing.
Payments made to non-residents for services performed within the state and payments made to the residents of the state must be reported in Form 1099-NEC.
1099-NEC Reporting Requirements For Wyoming
Wyoming does not require 1099-NEC filing as there is no state income tax in Wyoming.
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