e-File Form 1099-NEC with us Start Filling Now >>

e-File Form 1099-NEC with us Start Filling Now >>

What is 1099-NEC State Filing?

While many companies rely on IRS’s Combined Federal/State Filing (CF/SF) Program for their state filing obligations, many other states do not participate in the CF/SF Program. Businesses that operate in such states require the filing of 1099-NEC forms directly with the state revenue department. Additionally, many states that participate in the CF/SF program will still need to file forms with the state under certain conditions. The process of reporting 1099-NEC returns with the state department is known as state filing.

Why Do Certain States Require Separate 1099-NEC Filing?

With the adoption of Form 1099-NEC, many states faced delays in the inclusion of the NEC form in the CF/SF Program. States that relied on the CF/SF Program for income information in the past no longer will receive information from the IRS regarding payments of non-employee compensation. That’s why businesses have to be cautious while filing this new form as filing requirements change from state to state.

State-Specific Rules for Form 1099-NEC

Based on filing requirements, each state is categorized into 4 groups:
Group A: States that require 1099-NEC filing only with the IRS
Group B: States that require 1099-NEC filing only with the state
Group C: States that require 1099-NEC filing both with the state as well as the IRS
Group D: States that require 1099-NEC filing if certain conditions are met

Group A: File Form with the IRS

If your business operates in a state that belongs to Group A, you need not file your 1099-NEC form with the state as state income tax is not levied. They must file their form with the IRS. The states that come under this category are: 

New Hampshire

Texas

Florida

South Dakota

New York

Washington

Illinois

Tennessee

Wyoming

Nevada

Arizona

Alaska

Puerto Rico 

Rhode Island

New Mexico

 

Group B: File 1099-NEC Form with the State

If your business withholds state income tax then you will be required to file form 1099-NEC directly with the state. Such states include:

Colorado

Indiana

Maryland

Maine 

South Carolina 

Georgia  

Utah 

West Virginia

North Carolina

Kentucky 

Nebraska

Minnesota 

Iowa

Virginia

Ohio 

 

 

Group C: File Form 1099-NEC with the State & the IRS

A select number of states allow the IRS to automatically transmit the 1099 form to the state government. If your business is based out of states that belong to Group C, you will need to file the form with the state as well as the IRS. The states that come under this category are:

California

Idaho 

Pennsylvania

Connecticut

Oregon

North Dakota

Delaware

Montana 

Hawaii

Alabama

Mississippi

Vermont 

Wisconsin

Kansas

Michigan 

Massachusetts

Group D: File 1099-NEC Based on Specific State Rules

States like Arkansas require state filing of Form 1099-NEC when reporting payments of $2,500 or Louisiana where 1099-NEC is filed with the state department if the payment amount exceeds $1,000. Below states require filing of the 1099-NEC form with the state department based on specific rules include:

Arkansas

Louisiana

Missouri

Oklahoma

New Jersey

     

 

Final Thoughts

We understand that filing your 1099-NEC can be a daunting task, and with so many states updating their filing rules, staying compliant can be a stressful process. As the filing deadline closes in, it is imperative that you choose a trusted e-filing provider like Freelance Central to take care of your 1099-NEC filing needs.

The deadline to file 1099-NEC is January 31. Use Freelance Central for easy and fast filing. Register with us now and file your first form for free. Hurry!
The deadline tofile 1099-NEC is January 31
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