Welcome to 2020 year-end and all the fun changes for 1099’s! This year, the IRS has released a new 1099NEC form that is required for 2020 tax reporting for Non-Employee Compensation (NEC). NEC information was previously reported in Box 7 on the 1099-MISC form, so a whole new form is required this year.
To accommodate this, Microsoft has made the following changes:
The easiest way to update vendors for this new tax type is to use the Update 1099 option under Purchasing\Utilities. This will let you mass change tax type and update transactions as well. Please keep in mind that Box 7 on the 1099-MISC is now used for something else so make sure any vendors that are still setup as 1099-MISC vendors may need to be reviewed.
In order to get this functionality, Dynamics GP users will have to upgrade to the latest Dynamics GP release – version 18.3 or 2016 year-end update. This functionality will NOT be available for those on GP2015 or older.
That said, there are alternatives available if you’re on a version of GP that won’t get a year-end update, if you won’t have time to do an upgrade or if any of your ISV (add-on) products won’t be compatible in time.
Here are some of the other ways you can handle your 1099NEC filing.
Options we are familiar with and/or have used before:
Additional options that we are aware of but do not have first-hand experience with: