Form 1099-NEC Instructions for 2022 Tax Year

1. What’s new on Form 1099 NEC for 2022?

The IRS has made some changes to the 2021 tax year Form 1099-NEC. The changes includes 3 field level changes (on box 1, box 2, and FATCA check box).

2. How to fill out 2022 Form 1099-NEC?

Form 1099-NEC contains 15 boxes (fields) including two check boxes. Each box requires certain information with specific to the reporting. Following are the break down of each boxes of IRS Form 1099-NEC and explains how to fill out each.

Completing Payer Information on Form 1099-NEC

The IRS requires the following payer information on Form 1099-NEC:

• Payer's Name (Business or Individual Name)
• Payer's Address (Street, City, State, Country, ZIP, and Contact No)
• Payer's TIN (EIN or SSN)

Completing Recipient Information on 1099-NEC

The IRS requires the following recipient information on Form 1099-NEC:

• Recipient Name (Business or Individual Name)
• Recipient Address (Street, City, State, Country, ZIP, and Contact No)
• Recipient TIN (EIN or SSN)

Account Number: An account number is required if the payer is filing more than one 1099-NEC and having multiple accounts for a recipient.

Completing Box 1 to 7 on Form 1099-NEC

In Box 1 to Box 7, the payer has to report payments made and tax withheld from the recipient

Box 1 of Form 1099-NEC - Non Employee Compensation

On Box 1, enter the non-employee compensation that you have made to your recipient if it is $600 or more for a calendar year.

What are the types of payments to report under box 1 of Form 1099-NEC?

Box 1 reporting Includes

• Fees, Commissions, Prizes and Awards for services performed as a nonemployee
• Other forms of compensation for services performed for your trade or business by an individual who is not your employee
• Fish purchases for cash
• Oil and gas payments for a working interest, whether or not services are performed.
• Expenses incurred for the use of an entertainment facility that you treat as compensation to a nonemployee
• Federal executive agencies that make payments to vendors for services, including payments to corporations

Box 2 of Form 1099-NEC - Payer made direct sales totaling $5,000 or more

The IRS has added Box 2 recently to report sales of $5,000 or more of consumer products for resale, on buy-sell, deposit-commission, or any other basis. This was previously reported on Form 1099-MISC. Filers can either report it on Form 1099-NEC box 2 or Form 1099-MISC box 7.

Box 3 - Reserved for Future Use

The IRS has left the Box 3 for future use.

Box 4 - Federal Income Tax Withheld

Enter the tax withheld from the payments made to your recipient. This withheld ususally refered as backup withholding and the IRS requires payers to withhold certain percentage of payment from recipient when they fail to provide the right TIN information to the payer.

Boxes 5 to 7

Box 5: State tax withheld

Enter the state tax withholding if it is applicable in your state. You can report payments for up to two states.

Box 6: State/Payer’s state no

Enter your state identification number or the abbreviated name of your state. For example, MO - Missouri, MI - Michigan

Box 7: State income

Enter the amount of the state payment in this line.

3. When is Form 1099-NEC due for 2022?

Form 1099-NEC due date is on January 31st every year. The payers are also responsible for furnishing a copy of Form 1099-NEC to their recipients by the actual due date (i.e January 31st) to make sure that the recipient copy deadline is also met on-time.

4. Form 1099-NEC Copies

5. How to file Form 1099-NEC Electronically?

File your Form 1099-NEC electronically with the IRS, and the required state using TaxBandits, an IRS authorized e-file provider supporting e-filing for all the 1099, W2, 94x, and ACA Forms.

Simply follow the steps mentioned below to file your Form 1099-NEC electronically with the IRS:

• Step 1: Create a free TaxBandits account or Login If you have one already
• Step 2: Enter Form Information
• Step 3: Review Form Information
• Step 4: E-file it with the IRS and State

If you have opted for postal mailing or online access, TaxBandits will deliver copies to your recipients on your behalf.