© 2025 American Payroll Institute, Inc.
April 4, 2025 Volume 33 Issue 4
IRS Revises Forms 1099-MISC, 1099-NEC, and Instructions
The IRS revised Form 1099-MISC, Miscellaneous
Information, and Form 1099-NEC, Nonemployee
Compensation, along with the Instructions for Forms
1099-MISC and 1099-NEC.
What’s new
Golden parachute payments. Changes were made to both
Forms 1099-MISC and 1099-NEC. Box 14 of Form 1099-MISC
is now reserved for future use, which was previously used
to report total compensation of excess golden parachute
payments subject to a 20% excise tax. Box 3 of Form 1099-NEC
is now used to report excess golden parachute payments.
Form 1099-MISC other income. The instructions for Form
1099-MISC Box 3 lists new items that are required to be
reported, including:
• A payment or series of payments made to individuals to
achieve a specific objective, produce a report or other similar
product, or improve or enhance a literary, artistic, musical,
scientific, teaching, or other similar capacity, skill, or talent.
• Any Tax Receivable Agreement (TRA) payments, which
are payments made pursuant to a contract where a buyer of
a business pays a seller of the business for certain reductions
in tax liability associated with the sale.
Reminders
Continuous use revisions. In 2022, both forms and the
instructions were changed from annual forms to continuous-
use forms that are updated as needed.
Electronic-filing threshold. The IRS finalized regulations
to reduce the threshold requirement for filing information
returns electronically from 250 to 10 for returns required to be
filed after December 31, 2023 (see PAYROLL CURRENTLY, Issue 1,
Vol. 33). The lower threshold also applies in the aggregate to
all information returns required to be filed rather than to each
return individually.
Corrections to forms. The instructions include information
for correcting forms that have been sent to the IRS. For
paper returns, see part H in the General Instructions for
Certain Information Returns. For electronic corrections in the
Filing Information Returns Electronically (FIRE) system, see
Publication 1220, Specifications for Electronic Filing of Forms
1097, 1098, 1099, 3921, 3922, 5498, and W-2G. For electronic
corrections in the Information Returns Intake System (IRIS)
system, see Publication 5717, IRIS Taxpayer Portal User Guide,
or Publication 5718, IRIS Electronic Filing Application to
Application (A2A) Specifications.
Filers should not check the VOID box when filing a
correction on a paper form, which alerts IRS scanning
equipment to ignore the form and proceed to the next one.
If the VOID box is checked, the correction will not be entered
into IRS records.
Form 1099-K. Payments made with a credit card or
payment card and certain other types of payments, including
third-party network transactions, must be reported on Form
IRS Revises Forms 1099-MISC, 1099-NEC, and Instructions..... 1
DOL Will No Longer Enforce Federal Contractor Wage
Change. .............................................................................................2
State Unemployment Insurance Taxable Wage Bases
for 2025.............................................................................................. 2
U.S. Supreme Court Denies Review of Payroll-Related Cases..... 3
Court Rules Inside Sales Reps Were Not Exempt Employees.... 4
IRS Releases Publication on Withholding for 2025.................... 5
2025 Extensions Law Funds Government Until October.......... 5
Register to Attend PayrollOrg’s 43rd Annual Payroll Congress.. 5
IRS Releases 2025 Form 1099-R. ......................................................6
USCIS Makes Minor Changes to Form I-9, E-Verify Language. ..6
IRS Updates Employee Retention Credit FAQs............................. 6
Test Your Knowledge With the Payroll Pop Quiz. ........................6
Payroll Solutions. .................................................................................7
IRS Announces Quarterly Interest Rates........................................ 7
District Court Says Request for Future Leave OK for FMLA
Eligibility............................................................................................ 7
Businesses Can Pay IRS Through Direct Pay................................. 8
Fall Regulatory Agenda Includes Payroll-Related Items........... 8
Office of Solicitor Highlights Efforts to Protect Workers’
Rights. ..............................................................................................10
TIGTA Reports on IRS’s Update to Inflation Reduction
Act SOP. ...........................................................................................11
Update on Employment Tax Enforcement Actions..................12
Special Report: PayrollOrg’s 2025 Capital Summit. .................13
State and Local Highlights...............................................................16
PayrollOrg Asks U.S. Department of Education About Student
Loans. .........................................................................................................18
PayrollOrg Testifies in Connecticut on Earned Wage Access
Bill................................................................................................................18
Government Relations Presents Insights at Capital Summit......19
April 4, 2025 Volume 33 Issue 4
IRS Revises Forms 1099-MISC, 1099-NEC, and Instructions
The IRS revised Form 1099-MISC, Miscellaneous
Information, and Form 1099-NEC, Nonemployee
Compensation, along with the Instructions for Forms
1099-MISC and 1099-NEC.
What’s new
Golden parachute payments. Changes were made to both
Forms 1099-MISC and 1099-NEC. Box 14 of Form 1099-MISC
is now reserved for future use, which was previously used
to report total compensation of excess golden parachute
payments subject to a 20% excise tax. Box 3 of Form 1099-NEC
is now used to report excess golden parachute payments.
Form 1099-MISC other income. The instructions for Form
1099-MISC Box 3 lists new items that are required to be
reported, including:
• A payment or series of payments made to individuals to
achieve a specific objective, produce a report or other similar
product, or improve or enhance a literary, artistic, musical,
scientific, teaching, or other similar capacity, skill, or talent.
• Any Tax Receivable Agreement (TRA) payments, which
are payments made pursuant to a contract where a buyer of
a business pays a seller of the business for certain reductions
in tax liability associated with the sale.
Reminders
Continuous use revisions. In 2022, both forms and the
instructions were changed from annual forms to continuous-
use forms that are updated as needed.
Electronic-filing threshold. The IRS finalized regulations
to reduce the threshold requirement for filing information
returns electronically from 250 to 10 for returns required to be
filed after December 31, 2023 (see PAYROLL CURRENTLY, Issue 1,
Vol. 33). The lower threshold also applies in the aggregate to
all information returns required to be filed rather than to each
return individually.
Corrections to forms. The instructions include information
for correcting forms that have been sent to the IRS. For
paper returns, see part H in the General Instructions for
Certain Information Returns. For electronic corrections in the
Filing Information Returns Electronically (FIRE) system, see
Publication 1220, Specifications for Electronic Filing of Forms
1097, 1098, 1099, 3921, 3922, 5498, and W-2G. For electronic
corrections in the Information Returns Intake System (IRIS)
system, see Publication 5717, IRIS Taxpayer Portal User Guide,
or Publication 5718, IRIS Electronic Filing Application to
Application (A2A) Specifications.
Filers should not check the VOID box when filing a
correction on a paper form, which alerts IRS scanning
equipment to ignore the form and proceed to the next one.
If the VOID box is checked, the correction will not be entered
into IRS records.
Form 1099-K. Payments made with a credit card or
payment card and certain other types of payments, including
third-party network transactions, must be reported on Form
IRS Revises Forms 1099-MISC, 1099-NEC, and Instructions..... 1
DOL Will No Longer Enforce Federal Contractor Wage
Change. .............................................................................................2
State Unemployment Insurance Taxable Wage Bases
for 2025.............................................................................................. 2
U.S. Supreme Court Denies Review of Payroll-Related Cases..... 3
Court Rules Inside Sales Reps Were Not Exempt Employees.... 4
IRS Releases Publication on Withholding for 2025.................... 5
2025 Extensions Law Funds Government Until October.......... 5
Register to Attend PayrollOrg’s 43rd Annual Payroll Congress.. 5
IRS Releases 2025 Form 1099-R. ......................................................6
USCIS Makes Minor Changes to Form I-9, E-Verify Language. ..6
IRS Updates Employee Retention Credit FAQs............................. 6
Test Your Knowledge With the Payroll Pop Quiz. ........................6
Payroll Solutions. .................................................................................7
IRS Announces Quarterly Interest Rates........................................ 7
District Court Says Request for Future Leave OK for FMLA
Eligibility............................................................................................ 7
Businesses Can Pay IRS Through Direct Pay................................. 8
Fall Regulatory Agenda Includes Payroll-Related Items........... 8
Office of Solicitor Highlights Efforts to Protect Workers’
Rights. ..............................................................................................10
TIGTA Reports on IRS’s Update to Inflation Reduction
Act SOP. ...........................................................................................11
Update on Employment Tax Enforcement Actions..................12
Special Report: PayrollOrg’s 2025 Capital Summit. .................13
State and Local Highlights...............................................................16
PayrollOrg Asks U.S. Department of Education About Student
Loans. .........................................................................................................18
PayrollOrg Testifies in Connecticut on Earned Wage Access
Bill................................................................................................................18
Government Relations Presents Insights at Capital Summit......19
