The IRS has introduced a new form called the 1099-NEC (for Non Employee Compensation), that will replace the Form 1099-MISC for most homeschool groups and homeschool businesses like Classical Conversation Directors.
The 1099-NEC is the form your homeschool group must give to any individual that you paid more than $600 in 2020. That might be your co-op teachers, CC tutors, or independent contractors like a web designer.
It is due to the worker by January 31, 2021. A copy gets send to the IRS as well, along with a Form 1096 Summary sheet.
The Form-NEC is quite simple. You simply fill in your organization’s name, address, and Taxpayer ID Number (TIN) more commonly called your EIN (Employer Identification Number).
Then also fill in the worker’s name, address, Social Security Number and the total amount they were paid in 2020 in Box 1.
How to file a 1099-NEC
Unfortunately, you cannot download and use the Form 1099-NEC found on the IRS.gov website. It has a special red ink that home printers do not duplicate correctly for the IRS machines to read.
Instead of using paper, I recommend Yearli.com as an online service I use to file Form 1099-NEC. Yearli mails a copy to your worker, sends a copy to the IRS, and creates a pdf file for you to keep. Easy! And it’s Core plan is FREE! The Core plan should be enough for most homeschool groups.
Learn more about paying workers
Paying Workers in a Homeschool Organization
Are you paying workers in your homeschool organization?
- Can a volunteer be paid?
- Should a worker be treated as an employee or independent contractor?
- Do you know the difference?
Homeschool leader and CPA, Carol Topp, has the answers to your questions in her book Paying Workers in a Homeschool Organization.
This 130 page book covers paying workers as employees or independent contractors. There are also chapters on paying volunteers and board members. It includes sample forms, tips and advice to help you pay workers in accordance with the IRS laws to help your organization pay their workers correctly. Written specifically for homeschool organizations.