The 1099-NEC form is no longer included in the IRS 1099 Combined Federal/State Filing Program for 2020, so payers don’t have that option of having electronic 1099-NEC files automatically forwarded to states.
Here’s what that means to you: In the past, many states received 1099-MISC forms reporting payments of non-employee compensation directly from the IRS through Combined Fed/State filing, alleviating the need for filers to also send that information to payees’ state taxing authorities. Form 1099-MISC is still in the Combined Fed/State program, but for 2020 it’s no longer used to report non-employee compensation. For 2020 payments, payors with an obligation for state reporting of non-employee compensation payments must file their 1099-NEC forms directly to the states.
But beware: Unnecessarily filing 1099s with states, just to be safe, can expose you to a set of new and expensive requirements.
Filing deadlines for the new 1099-NEC form are January 31 (or this year, because that’s a Sunday, on February 1).
Clear as mud, right?
Because any summary can raise more questions than it can answer, IOFM assembled a panel of three AP leaders to question one of the leading experts on these changes: Cokala’s Marinanne Couch. The questions were drawn from their experience, as well as the more than 300 1099 questions that have been posed through Ask the Expert.
Marianne Couch, JD - Principal, Cokala Tax Information Reporting Solutions, LLC
Marianne Couch, JD, a Principal in the Cokala tax group since its founding early in 2007, is an experienced and well-known advisor on U.S. federal and state tax information reporting compliance. She is a frequent lecturer at major tax conferences and the author of The Master Guide to Form 1099 Compliance and numerous published articles. She is a founding partner of Cokala. Previously, she was for many years the Research Director of the tax reporting specialty firm Balance Consulting, and chaired special training and advisory services provided to large organizations and academic and nonprofit institutions. She also formerly served as the executive director of the National Association of Form 1099 Filers, Inc.
Marianne was an appointee for three years to the IRS Information Reporting Program Advisory Committee (IRPAC), where she was Chair of the IRPAC Subcommittee on Small Business and Self-Employed (SBSE) tax issues.
Marianne formerly served as a Research Attorney for the Michigan Court of Appeals, and earlier as a litigator for a large Michigan law firm, where she represented individuals and large clients in many types of civil actions. She received her JD, cum laude, from the Michigan State University School of Law, and is a member of the State Bar of Michigan.
Beth Witkiewicz, APPM - Director, Accounts Payable and Procurement, New York Institute Of Technology (NYIT)
Beth Witkiewicz leads the Accounts Payable and Purchasing function at New York Institute of Technology and is responsible for approximately $60 Million in annual spend. She began her professional career at New York Institute of Technology in the Accounting department where she eventually held the role of Senior Accounting Supervisor. She transitioned to become the Director of Accounts Payable where she helped transform the department’s operations to be more cost effectively and process the invoices and payments in a more timely fashion. This included streamlining employee reimbursements, enhancing invoice processing, and expanding payment methods to include ACH. Beth is currently working on streamlining and automating the invoice, purchasing and P-card process. Beth holds a bachelor’s degree in Accounting from New York Institute of Technology.
Nicole Caley, MBA, APM - Sr. Director of Accounts Payable, AAR
Nicole Caley brings almost 20 years of diverse and extensive experience within the operational accounting realm. As current Director of Accounts Payable with AAR Corporation and Founder & President of Payables Solution Partners, LLC, she not only leads a 17-person team that ensures the accuracy over $1 billion in payments annually, she consults AP teams across the country creating world class AP departments and processes. In her roles, Nicole concentrates intensively on Organizational Leadership, staff development, training, and using technology to advance the world of accounts payable. She uses her results- oriented, entrepreneurial mindset and leadership ability to drive change. During her career, she has developed a strong work ethic coupled with a strong record of success, and she is passionate about serving, motivating, and inspiring people.
Christine Battles, APM, CPRS - Accounts Payable Manager, UNIFIRST
Christine Battles has more than 18 years of AP experience and is passionate about re-engineering processes, streamlining and maximizing efficiencies, defining and documenting policies and procedures, looking for opportunities to mentor, grow & develop individuals, while insuring necessary compliance controls.
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