As we discussed in a previous blog, the IRS announced 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. The other boxes have moved around. The Dynamics GP update will handle which box things go into (but note the new fields on the Vendor form below).
As we barrel toward year-end, we are beginning to get a clearer picture from Microsoft what our options are regarding the new 1099 non-employee compensation reporting rules. Our Dynamics GP team has explored all the possibilities and come up with a list of four options.
Option One: Upgrade Dynamics GP
The first option is one we always recommend, but realize that it can be a large undertaking: upgrade to Dynamics GP 18.3. The scheduled release date for this newest version is October 1st, 2020. If you’re running GP 2015 or older, this could be a great option for you, since extended lifecycle support has elapsed and you will no longer receive year-end updates.
Option Two: Year-End Update
If you are running GP 2016 or GP 2018, the best option for you will be able to apply the annual year-end update. This releases in November, and will automatically include the updates to the new 1099-MISC and 1099-NEC forms.
Option Three: Purchase Greenshades
Greenshades is a trusted ISV partner of ours. We’ve recommended them for years, but they are especially useful now. You can work with Greenshades to file electronically or have them send out the 1099s for you. They will ensure you’re compliant with the new standards, and can work with all versions from GP 2013R2 up. The only downside that our customers have reported is that this option is pricey.
Option Four: Use a Third-Party Solution
The final option is to buy an add-on product like one of these below to print the forms. Some have electronic filing instructions with an exported file from Dynamics GP to Excel/CSV. Crestwood can help you with this export by using our new 1099-Xport tool. This is the most cost-effective, but also the most labor-intensive option. It is likely the ONLY option for GP 2013R1, and best for other older versions who do not wish to upgrade.
These online or downloadable programs are recommended by GPUG users (but the Crestwood team has not vetted these, yet. We will update as we continue to test and learn more).
- Tax 1099
- eSmart Payroll
- 1099 Express
- Tax Forms Store (comes bundled with the Office Depot brand 1099 forms)
What do I do?
Your next step, no matter which version you’re on, is to reach out to your Crestwood CAM. They will be able to discuss all the options with you, talk pricing and timelines, and decide together what the best course of action is. They will then put you in touch with Crestwood support, and ensure that you’re all set come filing time.