Updated: Oct 7, 2021
LAKEWOOD, COLO. - [August 14, 2019] - The IRS will begin using form 1099-NEC (Non-Employee Compensation) once again during the 2020 tax year. In 1983, the IRS started requiring businesses to file Form 1099-MISC for contract workers such as owner-operator truck drivers. Now the IRS is reverting back to form 1099-NEC.
The revival of this form is related to the Protecting Americans from Tax Hikes Act of 2015 (PATH Act), which requires businesses to file information returns about any non-employee compensation by January 31 of each year. This resulted in problems with the IRS’ processing systems because there was still a due date of March 31 for any 1099-MISC forms that didn’t contain non-employee compensation.
To simplify this, the new Form 1099-NEC contains an extra box and a single due date. Click here to view a draft of the form, available on the IRS website.
Fleet owners are advised to take note of this change, as it will require them to issue a different form to their owner-operator independent contracts likely beginning with 2020 income. ATBS will continue to share additional information about this change as it becomes available.
American Truck Business Services (ATBS) is the largest tax, consulting, and bookkeeping firm in the transportation industry, with over 20 years of experience working with owner-operators and independent contractors. Since 1998, ATBS has helped over 150,000 clients earn more money, reduce stress, and drive a richer life. In 2016, ATBS developed the RumbleStrip line of service packages, which includes back-office solutions for truck drivers in every stage of their careers. For more information, visit www.ATBS.com.