Everything you need to know about Sage 100 and the new form 1099-NEC requirements.

Why are there new requirements?

The IRS has made a significant change in the way non-employee compensation payments are reported on the 1099 form. Previously, these payments were reported on Form 1099-MISC, Box 7. The non-employee compensation field was removed from the 1099-MISC form so beginning with the 2020 tax year, these payments are to be reported on Form 1099-NEC, Box 1.

How has this been handled in Sage 100?

The new form 1099-NEC Nonemployee Compensation was included in Sage 100 versions 2020.1, 2019.4 and 2018.10 only. This will also include changes to 1099-MISC.  If you are running a version of Sage 100 that is older than v2018, it will not be compliant.  Sage 100 v2018 and other older editions are not supported by Sage Software.

1099 form changes will be included in Aatrix year-end update released in mid-December 2020.

Errors may be received prior to the Form Update in Aatrix. Error examples include:

“Error loading form 1099-NEC……” or “Missing form page …………\Sage\Aatrix\Forms\1099_NEC………”

See IRS.gov for 1099-NEC, 1099-Misc changes and instructions.  The utility is only to be used if 2020 1099 MISC boxes were created based on the 2019 1099 MISC boxes and payments were updated.

Other changes made to the 1099 Misc form:

  • Renamed the Vendor field “Misc Box 9” to be “Payer Made Direct Sales $5000+”. This checkbox is now used by Misc Box 7 (moved from box 9)
  • A utility is available to allow customers to move data already updated in year 2020 from the 1099-MISC Form Box 7 Nonemployee Compensation box to the 1099-NEC form Box 1 for year 2020.
    This utility should only be used as a one-time tool for tax reporting year 2020 only. This utility is run by individual company code and will need to be run in each company.

Do you have questions about the new requirements?

It’s important that you plan for these changes.  If you have questions, please reach out to one of our Sage 100 team members at 260.423.2414 or info@dwdtechgroup.com.