Business Owners: There's a New Reporting Form for 2020

Beginning 2020, IRS has a new form, 1099-NEC, for reporting payments to independent contractors. An independent contractor is anyone whom you have paid to perform services for your business without their being on your payroll. The deadline for filing with the IRS and providing a copy to the contractor is generally January 31 (though this year we get one additional day because of the weekend), and IRS can hit you penalties if you’re late.


Form 1099-MISC still exists and you may also need to file those if you made other types of reportable payments, including attorneys, rent on business property, and certain other payments. The 1099-MISC deadline remains March 1 (March 31 if filing electronically).

Prior to the end of the year, you should:

  • Make sure you have a W-9 form from any potential person or company who falls into either category (independent contractor or other payee).
  • Plan to have your bookkeeping updated by early January so the forms can be filed before the deadline.

Q: Do I need a new W-9 form from a payee if I already have on file?

A: You should get a new form if you know that the information has changed; otherwise, it is generally not necessary to get a new one every year. However, you can request an updated one whenever you want to update your records.

Q: Do I need W-9 forms for independent contractors who I paid less than $600?

A: If there is absolutely no likelihood that you will pay more than $600 over the year, then generally no. However, payments for certain services (such as attorney services) are not subject to the $600 threshold. It’s always a good idea to get a W-9 form if you have any doubt whether it will be needed.

Q: Do I need forms from company payees (as opposed to individuals)?

A: Some types of companies are exempt from 1099 reporting, but it is a good idea for you have their W-9 form on file to prove that they were exempt. For example, if they told you they were a corporation and were not, their W-9 should protect you from any non-filing penalties.

Q: What do I do if someone refuses to give me a W-9?

A: If you have asked for a W-9 and are refused, you must withhold 24% federal tax from any payments to the person or company and send that money to the IRS.

Q: What are the consequences if I don’t file all required 1099-NEC or 1099-MISC forms?

A: if required forms were not filed, that must be disclosed on your tax return and may result in penalties. In addition, you may not be able to deduct those expenses on your return.

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