Failure to issue required 1099-NEC forms can result in penalties — and the IRS has been increasing enforcement.
When to Issue a 1099-NEC
Any non-corporate person to whom you paid $600+ for services. Exceptions: payments to C-Corps/S-Corps (except attorneys), payments via credit card/processor (reported on 1099-K).
Key Deadline
January 31: Furnish to recipients AND file with the IRS. No automatic extension.
NJ State Filing
NJ participates in the Combined Federal/State Filing Program. E-filing with the IRS automatically forwards to NJ.
Penalties
Range from $60 to $310 per form depending on lateness. Intentional disregard: $630+ per form with no cap.
Common Mistakes
Not collecting W-9s before payment, issuing to corporations unnecessarily, and misclassifying employees as contractors.
Disclaimer: The information provided is for general educational purposes only and does not constitute tax, legal, or investment advice. This content is not intended or written to be used, and cannot be used, for the purpose of avoiding penalties under the Internal Revenue Code. Tax outcomes depend on your specific facts and circumstances. Viewing this material does not create a CPA-client relationship. Personalized advice is provided only through a signed engagement letter.
Get Tax Tips from Greg
No spam, unsubscribe anytime.