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A business hires a contractor who lives in a different state than the business, and the contractor works from home in that different state. Total payments to the contractor are over $600 in the year.
For the 1099-NEC that the business needs to prepare/file, does the business need to:
- list the business' home state and amount in box 6 & 7,
- list the contractor's home state and amount in box 6 & 7, or
- leave box 6 & 7 blank?
Thanks!
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PhoebeRoberts
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Every state has different rules. You need to look up the rules for both the state the business is located in and the state the work was performed in.
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"Total payments to the contractor are"
at least...
"...$600 in the year."
Fixed it.
And the W9 reflects that this entity is subject to 1099-NEC reporting...
And your client did not pay the person through a Payment Settlement Agent? If so, the PSE sends out a 1099-K and your client doesn't send anything. Your client sends that form when your client is the one who paid by Cash or Check.
Don't yell at us; we're volunteers
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Thanks - I know that there are filing rules in each state based on where the individual is located, but I wasn't sure if the state actually listed on the 1099-NEC follows similar rules to W-2 state reporting. Will look at the states
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Good additions, as I did look into that and excludes some folks who were paid by credit/debit card. And of course it's "at least $600". Don't want the IRS on my tail for a $1 error! 🙂 They are such sticklers about details.
