We have now begun work on r3 which we expect to be available next month (or at least by then a a preliminary r3 release which has been fully tested) which will include many new updates including initial support for the "new" 1099-NEC form that users will be required to use when it comes time to file 1099 forms for 2020.
Form 1099-NEC was first used in the early 1980's and is now being resurrected. The Protecting Americans from Tax Hikes Act (2015) required that nonemployee compensation form reporting had to be completed by January 31 (in an effort to combat identity theft and refund fraud). That isn't a deadline just to provide copies to recipients but also to actually file with the IRS. And this has been the requirement with respect to form 1099-MISC box 7 (nonemployee compensation) reporting since calendar year 2016. For other types of miscellaneous income, the deadline is March 31 if filing electronically, otherwise by February 28.
These differing deadlines for the same form created problems for the IRS in processing 1099-MISC forms in determining whether or not they were timely filed, so much so that we are now going back to the 1099-NEC form for reporting nonemployee compensation starting with 2020.
|The old box 7 for nonemployee compensation is gone.|
|The 2020 1099-NEC. Nonemployee compensation is placed in box 1.|
Within Advanced Accounting, nonemployee compensation will still be considered treated as "type" 6 for purposes of classifying vendors for 1099 purposes (including payments for legal services) that will now print in box 1 of the new form. Updates to the "1099 Types" lookup in AP-A Enter/Change Vendor information as well as AP-Q Print 1099 Forms have been made to reflect the appropriate box number and form for each type.
Transmittal form 1096 has also been revised to include a check box for 1099-NEC forms. Each "type" continues to require a separate 1096 transmittal form, i.e. you submit 1099-NEC forms separately from 1099-MISC forms, each with their own transmittal form.
|The 2020 form 1096 transmittal. Note the 1099-NEC box to the right of 1099-MISC.|
The IRS approved forms that are currently available for review can't be used to effectively test actual alignment and position relating to those items which have changed, so when those become available from forms suppliers, we will then re-test the preliminary format changes that we have now made; but we have implemented what should be all of the other related logic changes especially in the AP-Q option which allows the user to choose which of the two forms should be processed among other things.
In addition, Adv 8 r3 will include an option that will allow an end user to make changes to certain report/form layouts including the new 1096 transmittal and the supported 1099-MISC and now 1099-NEC forms in the event of issues with printer margins, alignment, etc.
An e-file option may also be added later depending on end user interest.