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kassied
February 5, 2025
Question

Incorrect 1099 NEC for 2024

  • February 5, 2025
  • 2 replies
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On January 29th I pulled my 1099-NEC report from Quickbooks Enterprise Desktop and after checking everything and e filed them through Tax1099. Then I found a solicitation email from Melio, our 3rd Party Payment Processor that we use to pay almost all of our Accounts Payable invoices and charge it to our credit card of which we reconcile and pay in full each month.  The email gave instructions on how to export data from Melio to Tax1099 and file 1099-NEC's.  Quickbooks omits Vendor payments made by credit card and only reports payments made via Bill Payment/Check to 1099-NEC.  I did some online research and determined that vendor payments that we made through our Melio/3rd Party Payment Processor, we did not have to report 1099-NEC for as it was the responsibility of the 3rd Party Payment Processor or Credit Card which seemed correct considering that Quickbooks will not allow me to include payments made via Credit Card to this tax form or any of its reports.   I contacted Melio and they informed me that it is our responsibility to file 1099-NEC's for all our 1099 vendors and instructed me on how to sync the platform with Tax1099.  

 

My problem is this, I already e filed my 2024 1099-NEC's and of the 11 forms I processed, 6 of them were underreported considering that I have to report Bill Payment & Credit Card payments as half of my vendors receive payments by both methods, therefore underreporting income on the 1099 NEC I already filed/send to vendors. 

 

In addition to the underreporting, because I cant get my 1099 report to include credit card payments I had to manually calculate by using different reports.  When I include the 1099 Vendors that I paid through Melio, I have 11 more 1099-NEC's I need to file and the deadline was 1/31. 

 

I am hoping someone can confirm that it IS my responsibility to report 1099 NEC to my 1099 Vendors that were paid via Melio our 3rd Party Payment Processor and if so how to correct the 6 incorrect 1099NEC's that were e filed already? Or should I simply just create another 1099NEC for the Melio payments and send them to the vendors to combine with the other one I already sent?  I hope someone can clarify this for me. Thank you.

    2 replies

    R
    rvrfrf
    February 5, 2025

    Thanks for reaching out to the Community, kassied.

     

    If you filed your 1099-MISC and 1099-NEC forms and need to make corrections, per IRS regulations, you must correct errors the same way the original forms were filed. In the event you e-filed your originals, you must e-file the corrected forms. Additionally, if you printed your original form, you must print the corrected ones as well.

     

    For more information on this topic, you can review our Understand the IRS regulations for filing 1099s & W-2s article. The IRS also has information on their website about this process.

     

    Before making any changes, I'd initially recommend checking with a tax professional. They'll also be able to confirm any tax-related questions you have. If you're in need of one, there's an awesome tool on our website called Find a ProAdvisor. All ProAdvisors listed there are QuickBooks-certified and able to provide helpful insights for driving your business's success.

     

    In the event you e-filed with Tax1099, you can correct your forms in their platform. For detailed steps, you can refer to Tax1099's 1099 Corrections article.

     

    I've also included a detailed resource about working with 1099s which may come in handy moving forward: Correct or change 1099s in QuickBooks

     

    Please don't hesitate to send a reply if there's any additional questions. Have an awesome Wednesday!

    FishingForAnswers
    FishingForAnswers
    February 5, 2025

    @kassied  "I am hoping someone can confirm that it IS my responsibility to report 1099 NEC to my 1099 Vendors---"

     

    Insofar as it involves reporting credit card, debit card, or such payments, it absolutely is not your responsibility to include them on the 1099-NEC.

     

    Those are included on a 1099-K, a form provided by merchant service providers for credit and debit card payments they process for their client, among others. So, your original research was correct.

     

    I do not know who you spoke to at Melio, but your merchant provider is not the one who makes the 1099-K for your vendors in the first place.

     

    When you pay a vendor through credit card, the vendor's merchant service provider processes your credit card payment.

     

    Then, at year end, the vendor's merchant service provider prepares a 1099-K summarizing all of the credit card and debit card payments the vendor received and sends a copy to both the IRS and the vendor in question.

     

    If you include those credit card payments on a 1099-NEC and send that to the IRS, then you and the vendor's merchant service provider will be reporting the same income for the vendor to the IRS twice, inflating the vendor's income tax burden unnecessarily.

     

    As long as you did not include the credit card and debit card payments on the original 1099-NECs you filed, you should be fine insofar as this question is concerned.

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