Need to fix wrong address and state on 1099 NEC to avoid owing tax to wrong state?

[jb183]

My 1099-NEC. shows the address and state that I used to have but did not reside in the state before, during or after doing that work.  However, it shows the income as reported to that state.

Do I need to get the 1099-NEC reissued so the payor will. notify the old/wrong state that the earnings were not made while a resident of that state?

I'm worried that if I just enter the correct address in turbo tax and do not file income taxes in the wrong state, that that state will come after me for failing to file and pay taxes.

[MaryK4]

In most cases, states do not require the 1099-NEC unless taxes are withheld for that state.  See Combined Federal/State Filing (CF/SF) program.  

[jb183]

Thanks for the quick response. Luckily, in this case there was no withholding.

However,  the link provided has instructions to the issuer of the 1099 NEC on how to send their information to the IRS.  If you go there, then you get to https://www.irs.gov/pub/irs-pdf/p1220.pdf which instructs the issuer to send in a corrected 1099-NEC.  (and does not provide guidance to the recipient, or say anything about withholding.   Is there a different reference I should look at?

[MaryK4]

If you read the section Sec. 11 Corrected Returns, there is no indication that the NEC has to be corrected for inaccurate address.  The only time an address has to be updated is if you did not receive the form, which you obviously did.  The only other references is https://www.nctracks.nc.gov/content/public/providers/faq-main-page/faqs-for-1099s/faqs-for-1099s-Wro... which is specific to North Carolina, but there most likely are more if you search.  

If you do want to make sure, you can send a request to the issuer to update the address, this may not be a bad idea so you will either have a copy of the corrected form or at least made attempts to correct the issue.  Which state was on the 1099-NEC addressed to?  I can look for specifics there too.  @jb183 

[SteamTrain]

@jb183 

If you "uploaded" a picture, or PDF of that 1099-NEC, then that was the problem.

DON'T upload a Picture or PDF....since many times, the computer "AI" that interprets the data on the form, will mis-interpret some of it...this time, it was apparently an address field that isn't even needed.

Delete that 1099-NEC entirely (look for the trash can)...then re-enter it manually, typing in the data for it.  No address will be asked for.

[VolvoGirl]

And actually you can just enter it as Other self employment income or as Cash or General income.  You don't need to get a 1099MISC, 1099NEC or 1099K.  Even if you did you can enter all your income as Cash.  Only the total goes to schedule C.   You should be entering the income from your own records.

[jb183]

Thanks all for your ideas.  My concern is not with federal taxes but with state taxes.  If the 1099 NEC income was reported to a state that I didnt live or work in, I dont want that state coming after me for taxes since the form would lead them to believe that  I was a resident while earning the money.    So a correction would be for the benefit of the state to which the income was erroneously reported.  

Based on the section 11, it looks like only the payer can correct the record with the IRS and the IRS then notifies the state.  Is there any way for me to notify the (wrong) state directly?

[JamesG1 · Accepted solution]

Ideally, you would contact the issuer, the issuer would correct and the wrong state would never be the wiser.

Many times, the issuer will not or does not correct the form.  It is possible that the wrong information on the IRS form 1099-NEC may have already transmitted to the state.

Retain a record in your paper files that back up your income tax return and demonstrate that the state has no claim on the income.  

Perhaps you have a record of your move from the old state to your new home state.  Perhaps your sales records clearly had no connection with the wrong state.

Retain the records should a tax authority contact you at a later time.

@jb183