Correct Tax Forms

How to correct 1099-NEC forms after filing

Correcting a 1099-NEC Overview

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Starting on Feb 12th, corrections can be issued in Wingspan once all tax forms have been accepted by the IRS.

Corrections can be made through Wingspan after a tax form is submitted and the IRS has accepted the submission. If you or the recipient notices any errors on the form, you may resolve the error by submitting a correction to the IRS (for example, an update to the NEC total amount or a recipient's name).

There are two methods by which corrections might be surfaced and submitted:

  1. Payer Initiated: You, the payer, notice an error(s) and use the Start new correction button to begin the correction process. If there are multiple people on your team, anyone with access to a recipient can initiate a correction.
  2. Recipient Requested: The recipient notices an error(s) and submits a correction request through the Wingspan app. You, the payer, will be prompted to Review correction request from the recipient's 1099-NEC detail page to begin the correction process.

Common errors that can be corrected include NEC total amount, TIN or name, and address. Depending on when you submit a correction and what you are correcting, penalties may apply.

Regardless of whether the correction is payer or recipient requested, all corrections filed with the IRS for a recipient will be available to that recipient. Once you confirm and submit the corrections through Wingspan, they are submitted to the IRS, at which point they are either accepted or rejected.

Payer Initiated - How to Start a New Correction

  1. On the 1099-NEC Dashboard, click the tax form to correct (only forms labeled accepted can be corrected and filed).
  2. Click Start new correction.
  3. Select the type of error(s) to correct.
  4. Update the form information and click Continue.
Image of starting a new correction on recipient detail page

Start new correction (screenshot example)

Image showing error type selection for new correction

Select error type(s) (screenshot example)

Update the form information (screenshot example)

Update the form information (screenshot example)

When you make your changes and click Continue, you will have a chance to review the information one more time. You will be prompted to sign a standard legal declaration of the information's accuracy. We will inform you of which type of correction and forms will be filed:

Error Type 1: When you correct the Non-Employee Compensation (NEC) total, the IRS requires a single form to replace the original:

  • This form includes the updated information and a checked Corrected checkbox.

Error Type 2: When you correct the recipient TIN or Name, the IRS requires two forms to replace the original:

  1. The first form includes the original incorrect recipient information, zeroes out all totals, and a checked Corrected checkbox.
  2. The second form includes the updated information and an unchecked Corrected checkbox.
Image showing examples of correction type 1 and 2

Error types and forms (screenshot example)

Wingspan simplifies this process by allowing you to change the information and submit the correction all in one step. We generate both forms, which will be sent to the IRS and the recipient. They will also appear as separate forms in the history of the recipient's 1099-NEC detail page.

Click on Submit correction to the IRS, and your correction will be sent to the IRS and the recipient. Wingspan will then generate the necessary forms to correct the incorrect form. Once the IRS accepts (or rejects) the correction, the status will be updated on the 1099-NEC dashboard and detail page.

For details on all 1099 filing statuses, refer to the detailed documentation.

Image showing successful submission of corrections to the IRS

Correction submitted (screenshot example)

Image showing example of correction accepted by the IRS

Correction accepted status (screenshot example)

You can't correct the following:

  • Tax forms that the IRS hasn't accepted or rejected.
  • The form type itself (for example, changing 1099-MISC to 1099-NEC).

Recipient Requested - Review and Resolve Corrections

Recipients can report an issue with their filed 1099-NEC tax form for you to resolve within Wingspan in a process very similar to starting a new correction.

You will receive an email notifying you of a correction request, and the request will appear in the recipient's 1099-NEC detail page. Review the requested change(s) and either accept or reject the request.

  • Accept - Accepting the request will allow you to review all the information one more time before submitting the correction to the IRS.
  • Reject - Rejecting the request will prompt you to provide a reason to the recipient, and no correction will be filed with the IRS. There is an option to include an internal note to your team along with the reason given to the recipient. (You can start a new correction later, if needed.)
Image showing example of reviewing a correction request

Review correction request (screenshot example)

Image showing example of resolving a correction request

Resolve a correction request (screenshot example)

Address changes

There are two types of address changes as follows:

  1. State Changed - The address changed and the State is changed
    1. When the State changes, the existing federal and state filings will be voided. New 1099s will be filed with the both the federal and state entities.
  2. State Not Changed - The address changed and the State is not changed
    1. The IRS does not require a correction when the address has changed but the State has not changed.
    2. If the recipient request this type of address change as a correction, we will inform you, the payer, and the recipient that a correction is not needed.
    3. If the recipient requires a mailed copy of their 1099-NEC forms, they can contact you to re-mail the forms to their updated address.

If the address has changed and other corrections have occurred, we will help you determine what type of forms are required to file a correction (Type 1 or Type 2 Error). In all cases, the recipient will be informed of the correction (or if a correction is not needed) and have access to the forms.

Image showing example of the payer view of a recipient requested address change not needing a correction

Payer view of address change, State not changed (screenshot example)

Image showing example of the recipient view of a recipient requested address change not needing a correction

Recipient view of address change request, State not changed (screenshot example)

Federal tax classification changes

There are two types of federal tax classification changes as follows:

  1. 1099-eligible - The requested change in tax classification is still eligible for 1099
  2. 1099-ineligible - The requested change in tax classification is ineligible for 1099

The first (1) instance, will be a typical Type 2 correction. We will focus on the second (2) instance of 1099-ineligible requests in this section.

When the recipient requests a change in their tax classification to one that is ineligible for a 1099 filing, there are two scenarios:

A. 1099-ineligible tax classification ONLY - you have the following options:

i) Reject the correction request (provide a reason to recipient for the rejection)

ii) Accept and submit the correction request which will void the original 1099 filing

B. 1099-ineligible tax classification + additional eligible changes (e.g. TIN/name change) - you have the following options:

i) Reject the correction request (provide a reason to recipient for the rejection)

ii) Submit a correction request to void the original 1099 filing

iii) Submit a correction request with eligible changes (e.g. TIN/name change) as well as the ineligible tax classification change to the IRS anyway

In these scenarios, information and guidance will be provided when you review the correction request. You will have an opportunity to review the details thoroughly before making a decision to file or not file the correction.

Payer view of correction requests with ineligible tax classification changes (guidance along the way)

Payer view of correction requests with ineligible tax classification changes (prompts along the way)

Recipient View of Corrections

The recipient can access their submitted 1099-NEC forms and corrections (or voided forms, where applicable) from their tax documents dashboard. If there are multiple forms filed as a result of a correction (e.g., Error Type 2) or as a result of multiple corrections being filed over time, they will be able to access all forms from their dashboard.

Images showing examples of what a recipient sees on their tax dashboard

Recipient view (screenshot examples)

Correction Submission Period

The submission period to submit a correction for a 1099-NEC form through Wingspan is limited to 6 months after the IRS filing deadline (July 31, 2024). To submit a correction after this date, please follow the process outlined by the IRS and submit directly to them.