Error checking on W2 and 1099-NEC not working the same?

[WTSAbe]

Error checking on W2 and 1099-NEC not working the same?  I was sending a client last night and going over the return and EIN on their 1099-NEC was blank and it was no error checking for it.  So, I did some testing.  I remember if you created a new W-2 or 1099-NEC the EIN box and name and address box with light up in pink with error checking and it's not doing that now.  It only lights up like the state and zip code box.  It seems to stop doing it with the last update.   It also must be a shared component because the 2022 program is doing the same thing. Users become reliant on the error checking and so I expect this to cause some problems with some users' client's return because they forgot a EIN number especially for business clients. 

[Just-Lisa-Now-]

EINs arent cross matched on a 1099NEC thats been entered, so the EIN doesnt really matter, but that is weird that it highlighted as an error at one point then it stopped.

I personally have never entered one, I just put total income on the form that it belongs on.

[WTSAbe]

I don't know about it doesn't matter.  I think that information gets transmitted with the return.  I have had clients forgot one 1099-NEC in the past. They included the money in their non-1099-NEC income but they still got a letter from the IRS saying that this wasn't reported on the taxes. I know the data on the forms gets transmitted to the IRS but I never know which supporting data gets transmitted. It's like the 1095-A , nowhere on the 8962 do they display the policy number on the 1095-A except in the shared policy section.  Type it in wrong on the 1095-A and watch your client get a letter saying the IRS need to see the 1095-A. So that information definitely get transmitted with the return whether you use the shared policy section or not.  

[Just-Lisa-Now-]

Ive never had any kick back with the 1095A policy number, Ive left it blank and its never been an issue.

Ive never entered an actual 1099NEC and Ive never had a client get a letter about it either, as long as total income reported meets or exceeds what was reported on the 1099NECs, its never been an issue.  Only EINs on W2s and 1099Rs get cross matched.

[abctax55]

In 4 decades of tax prep, I have *NEVER* entered FEIN's from F.1099 MISC, or the 'new' NEC's.

It is not required by the IRS nor is it submitted with the efiling.  The total income is reported on the correct form, no detail is needed or required.  The fact PS (and some other software) allows for that data entry is just a method to get to the total.  

Any notices from the IRS related to F 1099 MISC/NEC income issues is because:

1) The total income reported on the return is less than the total income reported to the IRS (like, maybe.... the client forgot to provide one ??? Or, one got lost in the mail? Or, the issuer sent one to the IRS but not to your client.  Especially since some clients think the only income they have to report is what is shown on the various F.1099's.

2) The F.1099 showed the income in the wrong box, or even on the wrong form (like rent instead of NEC) and that wasn't taken into consideration when preparing the returns

[Just-Lisa-Now-]

I tell people this all the time, some just dont believe it, so if they want to waste their time entering a bunch of stuff that's not necessary, that's on them  🤷

[abctax55]

Yep, Lisa.... this comes up again, and again, and again,and again.

I'm just trying to stomp out the myth that entering *every* F 1099 individually is necessary.  SUCH a waste of time, during such a busy time of year.

Not quite sure why I keep trying 😉

[WTSAbe]

This is good to know. Thanks for the information.  Still doesn't change the fact that on the W-2 the program is not doing the error checking on a missing EIN. Even if it doesn't have to do it on the 1099-NEC.  I had those two incidents happen with clients. I just assume it was a forgotten 1099-NEC or typo on a 1095-A  but I guess it something else wrong.  PS provides entry for 1099-NEC, 1099-K, etc.  I just assume it was an IRS requirement for software companies to start doing so over the years. 

[abctax55]

As I don't use PS, I can't address the issue re: W-2 not having the FEIN entered.

And we all know where "ass-u-me" gets us.

[Just-Lisa-Now-]

My software shows an error if Im  missing an EIN on a W2 or a 1099R.

I did see another post over in the ProSeries Facebook group that someone mentioned that the red errors for missing info weren't appearing in the Forms In Use list for some clients, they had to close and reopen the file for the errors to appear, but it was random, it didnt happen to all clients.

So there may be some kind of glitch that's happening.

[Frustrated-in-IL]

@abctax55 said:

In 4 decades of tax prep, I have *NEVER* entered FEIN's from F.1099 MISC, or the 'new' NEC's.

Rookie.