This time of year, payroll departments get hit with the double whammy of preparing W-2s for employees and 1099 forms for their independent contractors. The bad news: The 1099 process for 2020 reporting will be more complicated because the IRS is rolling out a brand-new form, Form 1099-NEC, for reporting payments to independent contractors.
But the IRS isn't entirely ditching Form 1099-MISC. That means you will have two different sets of 1099s to file. (And it’s not clear yet whether states will accept Forms 1099-NEC.) Also, employers are facing intense new scrutiny of the 1099s from the IRS … and forms filed in the wrong medium (even correct forms!) can trigger millions of dollars in tax penalties.
The best defense for your payroll department is to learn about these changes now through our timely new webinar, led by payroll expert Alice Gilman, Esq., editor of Payroll Legal Alert.