Question

1099-NEC Exclusions on Turbo Tax Home and Business Prepared On My Computer

Forum|Forum|5 years ago
January 16, 2021
1 reply
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BACKGROUND - When prompted to prepare 1099-NEC for payments made in excess of $600, my minor son needs to report monies he paid subcontractors for services rendered, BUT there is a NOTE on that screen that states, "Do NOT include amounts paid electronically (debit/credit, PayPal, Square, etc.).

QUESTION #1 - For those 3 subs he paid with PayPal and Square-Cash App, does he just NOT need to REPORT to IRS period? (they were like $700, $2000, $1000) Including NOT reporting on 1096 Summary form?

QUESTION #2 - For the 2 subs he paid via a check, would he just report those 2 on 1099-NEC and the 1096 Summary form?

TurboTax Home & Biz Windows

T

ThomasM125

Per IRS instructions for form 1099-K:

"Payments made with a credit card and certain other payments, including third-party network transactions, must be reported on form 1099-K by the payment settlement entity under section 6050W and are not subject to reporting on form 1099-NEC"

You can read the full instructions here:

irs.gov/instructions/i1099msc

So, it would seem the credit card companies are to report that information to the recipient.

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