1099-NEC boxes 5-7

[magicalspirit1]

I am an independent contractor who lives in WA state and works remotely for a company in Kansas City MO.

I do analysis work for an IT company

The company who pays me is a recruiting firm in KS.

Last year...only box 1 on my 1099-NEC had my full nonemployee compensation listed in it.  I believe this was accurate

This year...they added WA in Box 6 and my full compensation amount Box 7 (along with my full compensation being listed in Box 1).

I believe this is wrong. The company I work for thinks they should have been doing this all along.

Are they right????

[RobertB4444 · Accepted solution]

Yes.  You reside and work in Washington state so that is where you earn your money.  If Washington state had a personal income tax then you would have to pay taxes on the money that you earn in the state on that return.  Since Washington does not have a personal income tax the boxes reporting it as income there make no difference.

@magicalspirit1 

[magicalspirit1]

According to what I have read....boxes 5, 6 and 7 are only if state taxes were taken out. 

[MayaD]

That's right. However, since Washington state does not have personal income tax as RobertB4444 mentioned, you can leave boxes 5, 6 and 7 empty. 

[magicalspirit1]

1)  Thank you both 🙂

2) to verify:  it is ok that they put $$$ in Box 7.  It will not impact my taxes because (as we all know) WA has no personal  state income tax

[RobertB4444]

Yes, that is correct.

@magicalspirit1 

[magicalspirit1]

Thank you!!!!!!

[sdwilliamson]

I have the same question except I reside in KY and the business is in NY. Box 6 is blank and I cannot seem to file taxes if this is the case.

[MonikaK1]

If you received a Form 1099-NEC and there was state withholding shown in Box 5, then Boxes 6 (payer's ID number) and 7 (income for the state listed) also need to be completed.

Contact the payer for their ID number if possible. Depending on the state, you may also be able to enter a generic series of numbers if you can't get their ID number. Contact the state Department of Revenue or visit their website.

If there isn't any state withholding in Box 5, then all three boxes 5, 6, and 7 may be blank.

@sdwilliamson