The IRS has recently released a draft of a new form, Form 1099-NEC, which will be used to report payments for Nonemployee Compensation paid in 2020. Payments made prior to 2020 have previously been made using Form 1099-MISC, box 7, Nonemployee Compensation (NEC).
Microsoft Dynamics GP will release a year-end update which will include a Payables 1099 NEC Form in mid- to late-November. You need to have Dynamics GP2016 or later installed to do the upgrade that includes the NEC form changes.
If you have Dynamics GP2015 or below installed, no year-end update is available as GP2015 is no longer supported by Microsoft. We recommend you contact us to schedule an appointment with our support team to provide you with the necessary report modifications and instructions on how to process the forms for 2020.
If you have Dynamics GP2016 or higher installed, it is important to get in touch with us now to schedule an upgrade that will encompass the form changes. If you only have 1099-Miscellaneous vendors with Box Type 7 (Nonemployee Compensation)* we can provide you with the necessary report modifications and instructions on how to process the forms for 2020 without performing the upgrade.
*If you are unsure how to find out whether or not you have Miscellaneous 1099 vendors with other types (Rent, Royalties, Attorney Proceeds, Medical Payments, etc.), we can assist you in finding that out.
In addition to the above changes, the IRS has changed the electronic filing threshold from 250 of a single form type to 100 of a single form type. For more information regarding the IRS changes related to 1099 forms and filing requirements, you may visit https://www.irs.gov/instructions/i1099msc.
While these changes are significant, taking action now will ensure that you have the time needed to make the necessary changes based on your version of Dynamics GP. And as always, if you have any questions on this or any other support related questions, we are here to help.
***UPDATE 10-23-2020 The IRS has delayed when electronic filing threshold will take place