News & InfoEP StoreAcademySupportCommunityProducts by Country
Blog Home

Payroll Tax Changes and the New Form 1099NEC

What you need to know before filing for the 2020 tax season
February 26, 2021

Becky Harshberger

The new year is here, and that means tax season is upon us. One important thing to note as your production company prepares to file taxes for the 2020 season is the IRS has announced an important and newly reintroduced tax document for reporting Non-Employee Compensation: Form 1099NEC. If your production company is filing 1099’s, this means the 1099NEC will be filed in addition to the standard 1099MISC. If you are wondering why or how to file the new form, stay one step ahead with this guide to understanding the new Form 1099NEC.

Why the change?

The 1099NEC is actually not a new form -- it was last used 38 years ago! On the previous 1099MISC, employers were required to report Non-Employee Compensation (NEC) earlier than the other items on the 1099MISC Form as a result of the Path Act in 2015 (Protecting Americans from Tax Hikes). This created confusion, so the IRS decided to create a separate form to submit this NEC information earlier, hence, Form 1099NEC is now making a comeback.

What gets reported on the 1099 NEC?

  • Prizes, awards, and other types of compensation
  • If you pay independent contractors or loan-outs through accounts payable Backup withholding (i.e., if a vendor doesn’t provide you with a tax information reporting ID number such as FEIN, TIN, or SSN on their W9)
  • State income withholding

Additional insights and tips for filing:

  • 22 states currently require direct filing with them specifically in addition to filing with the IRS: “The IRS and the states have not created the sharing agreement that they have with the 1099MISC because there wasn’t enough time to execute all of the agreements for the 2020 tax year, so there is no agreement in place to share 1099NEC information with the states like the IRS does with the 1099 MISC. So, there are 22 states that require direct filing with them.” - Becky Harshberger
  • If you have more than 250 of either Form 1099NEC or Form 1099 MISC, you’ll be required to file electronically. Note: electronic filing is always the preferred method by the IRS, regardless of quantity.
  • Some states will require electronic filing if you have more than 50 forms to report.

To file electronically with both the IRS and State, you’ll use the FIRE System (Files Information Returns Electronic).

Bonus: If you're using SmartAccounting, recent updates will expedite your filing! In a recent Master Series webinar featuring an in-depth conversation with Becky Harshberger, Vice President & Practice Leader of Payroll Tax, and Neddy Alonso, Senior Manager of Product Support Operations, the experts walked viewers through the new changes so they know exactly how to navigate the SmartAccounting system to properly tag invoices with new codes, pull tax reports, prepare forms, electronically file, and print the 1099NEC and 1099MISC forms.

Ready to dive in? Watch the webinar now at theproductioncommunity.com. And if you have questions or want to see what others have to say about the new 1099NEC filing process, join the conversation over at the Production Community Forums!

Related Content

EP Blog_SQUARE-Tips for tax day

Tips for Tax Day 2022

4/5/2022
Your ultimate tax filing checklist - the deadline this year is Monday, April 18th!
More
EP BLOG_Decoding-Your-Paystub-S

Decoding Your Paystub in 2022

2/2/2022
What deductions may look different in the new year
Streaming platform on tablet device

The Evolution of Residuals: How Streaming Changed the Model

8/11/2022
Understanding how residuals payments are calculated for new content on streaming platforms.
dollar signs representing digital crowdfunding

The Beginner’s Guide to Crowdfunding

7/26/2022
How filmmakers can leverage the power of social networks and online platforms to build buzz and secure...
EP Blog_SQUARE-Pitching Reality Tv-2

Pitching and Financing Unscripted Television

6/7/2022
Ready to sell your big idea for a reality TV program? This guide will help prepare you for the road ahead.
Bloomberg tax logo-Newsroom-Thumbnail

Remote Workforces Create New Employment Challenges for Employers

5/18/2022
Employers should be aware of any local tax obligations for employees working remotely.
EP Blog-World Revenues-2

The Beginner's Guide to World Revenues, Foreign Sales, and Senior Debt

5/17/2022
Learn how shopping your project around the world to secure funding commitments for distribution rights can...
Master Series Panelists-World Revenues, Foreign Sales, Senior Debt

Film Financing Explained: World Revenues, Foreign Sales, and Senior Debt

4/27/2022
Learn how working with agents, international distributors, and gap financiers can all factor into...

Producing with Purpose

4/27/2022
Creative Producer, Kimberly Goodman ('Selling Sunset', 'Project Runway') shares insights on creating...
Master Series Women in Animation-thumbnail

Women in Animation: A 3D View

3/24/2022
Marge Dean, Mandy Tankenson, and other women leaders from across animation come together to celebrate...
Bradley Cooper-nightmare alley

Meet the Assistant Director

3/16/2022
A conversation with Myron Hoffert ('Nightmare Alley')
International Film Financing panel-featured

Film Financing Explained: International Financing

3/10/2022
International production experts discuss how producers can utilize financing systems outside of the US,...
Anthony De La Rosa-EVP-Residuals

Spotlight: Anthony De La Rosa, Executive Vice President, Residuals

3/8/2022
Meet EP’s resident residual domain expert, Anthony De La Rosa, and learn what inspired him to enhance and...
EP Blog_SQUARE-Sound Mixer-Lora Hirschberg

Meet the Sound Mixer

3/1/2022
A conversation with Oscar-winning re-recording mixer, Lora Hirschberg ('Inception', Skywalker Sound)
Digging Out of a Deficit-featured

Digging Out of a Deficit: What to Expect in the Second Quarter of 2022

2/25/2022
Federal and State Unemployment Insurance rates are rising. Learn how these changes will affect 2022 and...
International Financing-John Hadity-ft

The Beginner’s Guide to International Film Financing

2/15/2022
What to know before you begin an international financing plan
meet-the-executive-producer-just-mercy-sq

Meet the Executive Producer

2/8/2022
A conversation with Mike Drake ('Just Mercy') on the path to becoming and EP, and the role of social...
EP-Blog-Meet-the-Set-Decorator-2

Meet the Set Decorator

1/19/2022
A Conversation with Claire Kaufman ('Little Women')

PayTalk: The Recipe for a Successful Payroll 2022 (Part One)

1/13/2022
Davida Lara joins the PayTalk podcast to share strategies for leading successful teams
creating-a-winter-wonderland-elf

Creating a Winter Wonderland

12/21/2021
How ‘Elf’ Production Designer, Rusty Smith, Produces the Perfect Snowy Scenes for Film and Television
2022 Budgeting-sq

Budgeting for 2022: A Production Accountant's Guide

12/15/2021
EP's Payroll Tax, Production Incentives, and Business Development experts explain how inflation,...
Master Series: Budgeting for 2022-1

Budgeting for 2022: What Productions Need to Know

12/10/2021
From unemployment taxes and worker's compensation to the price of labor and materials, production costs...
Shiran-Amir-Randy-Bricker-Meet-the-Editors

Meet the Editor

12/7/2021
‘Chucky’ editors Randy Bricker and Shiran Amir on navigating the entertainment industry and how they...

Payroll & Finances

PayrollResidualsSmartStartNew SmartTimeProduction PortalEP On LocationSmartAccountingEP LiveSmartPOCASHétPayPaymaster Rate GuideEP Residency

Manage Multiple Productions

AssetHubSmartHubSmartHub Vault
Subscribe now

Be an industry insider with EP's
newsletters and alerts

LegalPrivacy NoticeSecurity
© 2022 Entertainment Partners. All rights reserved.