2020 has one more surprise in store for us: the resurrection of the IRS 1099-NEC form. After a 38-year hiatus, this form is back. What is 1099-NEC? This form adds to the other 1099 forms and it is used to represent non-employee compensation. Previously, non-employee compensation was reported in Box 7 of the 1099-MISC form. This year companies must use form 1099-NEC to report non-employee compensation. The IRS has published guidance on this form here. To be clear – this form does not replace the 1099-MISC; it is filed in addition to the 1099-MISC.
How does this impact Dynamics GP and Dynamics 365 Business Central customers? The good news is that Microsoft has taken this into account in their annual service packs for Dynamics GP and the latest release of Business Central online. For Business Central (BC), all you need to do is make sure that your partner schedules your upgrade before the form’s due date, which is at the end of February. The great thing about Business Central is that upgrades happen behind the scenes, and unless you have multiple customizations and 3rd party add-ins your BC upgrade should be a relatively low effort endeavor. The annual service packs for supported releases of Dynamics GP will also have the new 1099-NEC report layout.
If you are a Dynamics GP user on a version that has reached the end of mainstream support may be a good time to consider an upgrade and plan for your migration to Business Central. Once you upgrade to the latest version of GP, you will be on the Modern Lifecycle Policy. More details on the modern lifecycle policy can be found here:
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