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Effective for tax year 2020 and later, the IRS requires that nonemployee compensation be reported on the new Form 1099-NEC instead of on Form 1099-MISC that was used in 2019 and prior. Accordingly, we included an update on v.2019.4.0 for Accounting CS on December 23, 2019 that would find all 1099 recipient vendors using specific 1099-MISC boxes and add the new, equivalent 1099-NEC boxes to the vendor to use for 2020. However, the old 1099-MISC boxes were left on the vendors in order to complete the 2019 data entry and 1099-MISC forms. This, in turn, made it possible for the old 1099-MISC boxes to be inadvertently used for data entry during 2020 when the new 1099-NEC boxes should have been used instead.

The 2020.3.2 update for Accounting CS, released on November 9, 2020 for Virtual Office CS and Software as a Service firms, made the following changes to address vendors that were still set up incorrectly, along with transactions that are dated 2020 or later that were inadvertently using the wrong 1099 items.

Firms NOT using Virtual Office CS or Software as a Service received this update as v.2020.3.3 on November 16, 2020.

In the 1099 Properties tab of the Setup > Vendors screen

Added new 1099 Form Selection items if the vendor had at least one of the following 1099 properties:

• 1099-MISC (7) Nonemployee Compensation
• 1099-MISC (7) Nonemployee Compensation paired with 1099-MISC (17) State Income

If the criteria was met and the old form/box combinations existed on the vendor, the update added the corresponding new form/box combinations as new rows to the 1099 Properties tab except in situations where such combinations already existed.

* These 1099 items can be paired in any order.

In the Distributions tab of the Setup > Vendors screen

Updated the Distributions based on the following criteria:

• The vendor had at least one of the following 1099 properties:
  • 1099-MISC (7) Nonemployee Compensation
  • 1099-MISC (7) Nonemployee Compensation paired with 1099-MISC (17) State Income
• The vendor had distributions mapped only to 1099-MISC items. If the vendor had distributions mapped to any 1099 form that is not the 1099-MISC, they were skipped.
• The vendor only had 1099-MISC distributions mapped to any of the acceptable 1099 boxes that were mapped to the new 1099-NEC boxes listed below. If the vendor had distributions going to any other 1099-MISC boxes, the vendor was skipped and needed to be updated manually.

If all the criteria were met, the update replaced the following 1099 distributions on the vendor with the listed new 1099 distributions.

* These 1099 items can be paired in any order.

In transaction distributions of the Actions > Enter Transactions and the Actions > Enter Payables screens

Updated the distributions based on the following criteria:

• The transaction date was in the year 2020 or later.
• The transaction had at least one distribution mapped to the following:
  • 1099-MISC (7) Nonemployee Compensation
  • 1099-MISC (7) Nonemployee Compensation paired with 1099-MISC (17) State Income
• The transaction had 1099-MISC distributions mapped to any of the acceptable 1099 boxes that were mapped to the new 1099-NEC boxes listed below.

If all the criteria were met, the update replaced the following 1099 distributions on the transaction with the listed new 1099 distributions.

* These 1099 items can be paired in any order.

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