This article will help you enter income and withholding from Form 1099-NEC in ProSeries. Starting in tax year 2020, nonemployee compensation may be reported to your client on Form 1099-NEC. In previous years, this type of income was typically reported on Form 1099-MISC, box 7.
To access the Form 1099-NEC Worksheet:
- Press F6 to bring up Open Forms.
- Type 99N on your keyboard to highlight the 1099-NEC Wks.
- Select OK.
- In Create New Copy enter the Payer name from the 1099-NEC.
- Select Create.
How do I link a 1099-NEC Worksheet to another Schedule?
- Open a 1099-NEC Nonemployee Compensation Worksheet.
- In the Double click to link to: field double click.
- In the Select Schedule screen select an existing Schedule or create a new Schedule.
- Select the Link button.
How do I get the nonemployee compensation to flow as wages?
If you choose to report nonemployee compensation as wages on the 1040 the 8919 is required. For each firm listed on Form 8919, or each Form 1099-NEC with an entry in box 7 that is reported on Form 8919, a reason code must be entered. This code identifies the reason for filing Form 8919. The valid codes are:
- A - The person has filed Form SS-8 and received a determination letter stating that I am an employee of this firm. The date of the letter must be entered as the 'determination' date.
- C - The person has received other correspondence from the IRS that states that the person is an employee of the firm or payer of the Form 1099-NEC. The date of the letter must be entered as the 'determination' date.
- G - The person has filed a Form SS-8 with the IRS and has not received a reply.
- H - The person received a Form W-2 and a Form 1099-NEC from this firm this year. The amount on Form 1099-MISC should have been included as wages on Form W-2. (Do not file Form SS-8 if you select code H.)
For entering Nonemployee compensation in tax year 2019 and prior see Entering information from Form 1099-Misc