States Mandating 1099-NEC Filings- A Comprehensive Guide to Compliance Requirements

Which States Require 1099-NEC Filing

In the United States, the 1099-NEC form is used to report non-employee compensation, which includes payments made to independent contractors, sole proprietors, and other self-employed individuals. While the Internal Revenue Service (IRS) requires all businesses to file this form for payments exceeding a certain threshold, not all states have the same requirements when it comes to reporting these payments. Understanding which states require 1099-NEC filing is crucial for businesses to ensure compliance with state tax laws.

Overview of 1099-NEC Filing Requirements

The IRS mandates that businesses file a 1099-NEC form for payments to individuals totaling $600 or more during the calendar year. This form is used to report various types of non-employee compensation, such as royalties, prizes, and other income not subject to withholding. However, state requirements may vary, and some states require businesses to file a separate state version of the 1099-NEC form or to report these payments on their state income tax returns.

States Requiring 1099-NEC Filing

Several states require businesses to file a 1099-NEC form for payments made to non-employees. Here is a list of some states that have specific requirements:

1. California: Businesses must file a California 1099-NEC form for payments exceeding $600 to non-employees during the calendar year.
2. Florida: Florida requires businesses to file a 1099-NEC form for payments exceeding $600 to non-employees during the calendar year.
3. Georgia: Georgia requires businesses to file a Georgia 1099-NEC form for payments exceeding $600 to non-employees during the calendar year.
4. Illinois: Illinois requires businesses to file a 1099-NEC form for payments exceeding $600 to non-employees during the calendar year.
5. Massachusetts: Massachusetts requires businesses to file a Massachusetts 1099-NEC form for payments exceeding $600 to non-employees during the calendar year.
6. Michigan: Michigan requires businesses to file a Michigan 1099-NEC form for payments exceeding $600 to non-employees during the calendar year.
7. New York: New York requires businesses to file a New York 1099-NEC form for payments exceeding $600 to non-employees during the calendar year.
8. North Carolina: North Carolina requires businesses to file a North Carolina 1099-NEC form for payments exceeding $600 to non-employees during the calendar year.
9. Ohio: Ohio requires businesses to file an Ohio 1099-NEC form for payments exceeding $600 to non-employees during the calendar year.
10. Pennsylvania: Pennsylvania requires businesses to file a Pennsylvania 1099-NEC form for payments exceeding $600 to non-employees during the calendar year.

Conclusion

Understanding which states require 1099-NEC filing is essential for businesses to avoid potential penalties and interest charges for non-compliance. By staying informed about state-specific requirements, businesses can ensure they are in full compliance with both federal and state tax laws. Always consult with a tax professional or refer to the specific state’s tax authority for the most up-to-date information on 1099-NEC filing requirements.