1099-NEC preparation - State reporting

[JimS_1]

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!

[PhoebeRoberts]

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]

"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.

[JimS_1 · Accepted solution]

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

[JimS_1]

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.