ARTICLE | January 24, 2024 | Authored by RSM US LLP
As the Jan. 31 deadline for filing IRS forms 1099 rapidly approaches, filers are reminded of several small but important changes that have been published in the last few weeks that might affect your ability to file timely and may necessitate changes to your systems and processes. Specifically:
Additional details on new requirements appears below.
On Jan. 8, 2024, the IRS published a revised version of the 2023 Form 1099-NEC. Form 1099-NEC is used for reporting compensation (such as fees, commissions, and other payments) made to U.S. persons who are not the filer’s employees. The January 2024 version of the form incorporates several changes from the previous draft 1099-NEC released in September 2023 and follows the IRS announcement to move the Form 1099-NEC to a continuous use basis, instead of single year forms updated each year.
Key changes are the following:
Additionally, the instructional note/preamble that is attached to the official form was updated to clarify that filers of 10 or more information returns are now required to file them electronically.
Companies that are filing Forms 1099-NEC in house should build in sufficient lead time and budget to address these changes to Form 1099-NEC. There are potential system errors that may arise for taxpayers/filers if the above changes are not made prior to preparing the 2023 forms 1099-NEC. Filers using third parties to prepare and file their forms 1099-NEC should also confirm that their software vendors have updated their systems for the latest version of the form published this month.
The IRS recently published new Form 15397 in November 2023 which should now be used to request an extension of time to furnish recipient copies of information returns including forms 1099-NEC to each respective recipient. Filing form 15397 will extend the time to furnish recipient copies of Form 1099 to recipients by 30 days.
The deadline for furnishing recipient copies of 2023 Forms 1099-NEC to recipients is Jan. 31, 2024, while the deadline for furnishing recipient copies of Forms 1099-B, and 1099-S, and 1099-MISC (if amounts are reported in boxes 8 or 10) is Feb. 15, 2024.
If form 15397 is completed correctly and signed, and successfully transmitted to the IRS, the extended due date for furnishing the 2023 Forms 1099-NEC Recipient copies will be March 1, 2024, and the extended due date for filing Forms 1099-NISC, 1099-B, and 1099-S will be March 15, 2024. The form 15397 must be faxed to the IRS on or before January 31 each year at:
Internal Revenue Service Technical Services Operation
Attn: Extension of Time Coordinator
Fax: 877-477-0572 (International: 304-579-4105)
Please contact us if you have questions regarding your 1099 filing obligations and the impact of the changes discussed.
Call us at (541) 773-6633 (Oregon), (208) 373-7890 (Idaho) or fill out the form below and we’ll contact you to discuss your specific situation.
This article was written by Aureon Herron-Hinds, Paul Tippetts, Dustin Freeman and originally appeared on 2024-01-24.
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