Acumatica 1099-NEC Reporting Changes


Earlier this year, the IRS announced some big changes to reporting non-employee compensation and 1099 forms for the 2020 tax year. The 1099-NEC has moved non-employee compensation (box 7) off of the 1099-MISC to a new form: 1099-NEC.

Changes to 1099 Forms – A History Lesson

The IRS made the change because there was an issue with filing dates for the old 1099-MISC. Starting in 2015, the due date for filing non-employee compensation moved from March 31st to January 31st. As a result, the 1099-MISC form had two deadlines – one for Box 7 and another for everything else.

This year, to alleviate this issue, the IRS reinstated the 1099-NEC (Non-Employee Compensation) form that had not been used since 1982. This form again has a January 31st filing deadline, and is used to report non-employee compensation that was previously reported in Box 7 of the 1099-MISC.

The 1099-MISC form was redesigned as well. Non-employee compensation was removed and other boxes were rearranged. The new Box 7 contains “Payer made direct sales of $5,000 or more of consumer products to a buyer (recipient) for resale,” – which used to be entered in Box 9. Several other boxes were moved and relabeled as well.

What This Means for You

Well, unfortunately – we don’t exactly know yet.

Several 1099 reports and screens inside Acumatica will need to be modified for 2020. These changes will be made to all versions of Acumatica that are supported in 2020, including 2018 R2, 2019 R1, 2019 R2, 2020 R1, and 2020 R2. Users on prior versions of Acumatica will need to request a quote for a customization package.

Most likely, vendor bill entry should stay the same. There will likely be a new screen for the 1099-NEC E-file that will look like the current “Create E-File” screen. Acumatica will probably add one or more 1099-NEC reports/additional parameters.

Suffice it to say: Acumatica will support these IRS tax changes. And we will keep you up-to-date; as soon as we get more information, we’ll pass it along. Please reach out to your CAM with any questions, especially if you’re running Acumatica 2018 R1 or a prior build.

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