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1099-NEC preparation - State reporting

JimS_1
Level 3

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:

  1. list the business' home state and amount in box 6 & 7,
  2. list the contractor's home state and amount in box 6 & 7, or
  3. leave box 6 & 7 blank?

Thanks!

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JimS_1
Level 3

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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4 Comments 4
PhoebeRoberts
Level 11
Level 11

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.

qbteachmt
Level 15

"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.

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JimS_1
Level 3

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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JimS_1
Level 3

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.  

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