Form 1099-NEC

[rwilsond]

I am a sole-proprietor, providing engineering consultant services to clients in California. In 2020, I billed a new client $4,000 for a retention fee, and $3,000 for consulting services. Accordingly, my client provided me a 2020 Form 1099-NEC with $7,000 in Box 1, and all was good. Then, in 2021, my Client paid me $600 as a final payment for my services, and I then returned to him the $4,000 held in retention (for a 2021 net gain of $3,400 to my client). Who gives who a 2021 Form 1099-NEC, and how much in its Box 1?

[Mike9241]

not you. at best the client to you for the $600.   on your return, you'll show a refund of $4000

[rwilsond]

Thanks for the reply - hopefully my client will agree.