As we’ve been hammering home, the IRS made changes to the ways that non-employee compensation is filed, depending on the nature of the income. It moved non-employee compensation from Box 7 on the 1099-MISC to its own form: the 1099-NEC. This would include all independent contractors, gig workers, or self-employed individuals who previously had their payments reported in box 7 of a 1099-MISC form. Preview (opens in a new tab)
In Dynamics GP, you USED to be able to simply specify a vendor as a 1099 vendor, and print perfect 1099s and file them however you chose to. This year, with the new filing requirements, some action is needed.
Step One: Note the New Filing Date
First thing to note: the filing date for both is now January 31st each year – or whatever business day follows it – which this year is February 1, 2021. This includes submitting Copy B to each contractor. If you miss the deadline for filing with the IRS, you can apply for an extension, but you MUST still send Copy B to your contractors by February 1st, 2021.
Step Two: Check Your GP Version
Next thing to note is your version of Dynamics GP. If you’re running Dynamics GP 2016 or GP 2018, all you need is to install the year-end update. [Reach out to your Crestwood CAM for more info about applying this update!] Your system will then be configured to handle the changes, and you can file as normal (keeping in mind the new filing date).
If you’re on an older version (or if you do not wish to apply the year-end update), proceed to step three.
Step Three: Export Data in the Proper Format
If at this point you cannot upgrade to a newer version of Dynamics GP that supports the new filing requirements, you’ll need a workaround. A trusted ISV partner called Greenshades has this capability, but the one downside is that it’s pricey. Some customers have asked for a most cost-effective option.
But here is where Crestwood comes in. Our talented team of developers has produced an add-on called 1099-Xport that is:
- Very inexpensive
- Installs and connects to data in minutes
- Exports in seconds
You will then take this file and use a third-party 1099 filing software. GPUG members recommend:
- Tax 1099
- eSmart Payroll
- 1099 Express
- Tax Forms Store
(comes bundled with the Office Depot brand 1099 forms)
The penalties for missing the filing deadline can be steep. You must be sure you’re ready to go come tax time. Please reach out to your CAM with any questions.