When do I have to file the 1099-NEC? | You may be required to file Form 1099-NEC directly with your state

From the tax year 2020, it is required to file Form 1099-NEC by 31st January of the next year, no matter if one chooses to file the Form electronically or on paper. If this deadline falls on a weekend or a national holiday, the next business day is chosen as the deadline. There is no automatic extension available to file Form 1099- NEC and the IRS will not be sharing the information with the states. The businesses should have sent Copy A of Form NEC to the IRS and sent Copy B and Copy 2 of the Form to the non-employees of the organization.

When should you file Form 1099- NEC?

Form 1099- NEC is a new IRS form for reporting nonemployee compensation of $600 or more to a payee. This Form has to be filed electronically with the IRS either on paper or by electronic mode. The last date for sending the form to the recipients is February 1st, 2022. There is an automatic 30-day extension to file the Form, but this extension is available only under certain unavoidable conditions, such as the payee not providing their TIN to the payer or in conditions where the TIN number is incorrect, etc. Taxpayers should report and submit the form to avoid fines and late penalties. It is also important to fill Form 1099- NEC without any errors, and IRS recommends the electronic e-filing process as it is the quickest, accurate and convenient way of filing within the deadline. 

Filing Form 1099- NEC directly with the state

According to the publication released by the IRS on October 20, 2020, Form 1099- NEC is not a part of the combined federal and state filing program, and that the IRS will not forward Form 1099- NEC to its participating states. Some of the states in the US however do not participate in the combined central and state filing program and these states require their businesses to file copies of Form 1099 directly with the state. Even some states that participate in the combined Cf/SF program require direct filing with the state. 

A number of states have announced direct filing requirements with the adoption of the 1099-NEC Form as a result of the delay in the inclusion of the Form with the CF/SF program. These states will not receive any information pertaining to non-employee compensation from the IRS. It now becomes the responsibility of the businesses to determine in which states they are obliged to file Form 1099- NEC directly with the state and complete the process within the deadline. 

State e-filing service from Tax2efile

Tax2efile offers a state e-file service for businesses and individuals at no additional charges. It will upload the file directly on the state’s website and ensure that the taxpayer does not invite any additional charges and penalties. It offers direct e-filing for more than 50 states in the US along with the transmittal/recon Forms. 

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