Massachusetts Form 1099 Nec 2024-2025

Massachusetts Form 1099 Nec: What You Should Know

You file the 1099-MISC form in the state where you filed the original form. The state of Massachusetts allows you to file both states simultaneously. Example: M.D. is employed by a private equity firm where she receives no salary. F.E.B. is her client. She is paid from a firm investment fund by the client with whom she works under a contract. The firm provides her with a contract to provide consulting services and her consulting fee is 2,000/month. F.E.B. files a 1099-MISC as required by federal regulations, even though the firm does not withhold federal income tax from federal withholding from F.E.B.'s personal income. In addition to the filing requirements, Massachusetts requires you to pay a 0.50 Federal Business Tax on Forms 1099-MISC, because that business tax is based on the withholding on the 1099. Your consulting fees are based on the full amount to be withheld and deposited. Example: M.D. is not an employee but receives a contract with the private equity firm that invests in her work with F.E.B. The firm pays her 2,000/month with no fixed salary. The firm provides the consulting services and the consulting fee is 800. In both cases the firm must withhold 1,000 from her pay for federal income tax and 0.50 from her personal income tax. In either case, the firm must have paid 25,000 in total (taxable income from F.E.B. and consulting services to M.D.) to the state in order to meet the 25,000 withholding obligation. F.E.B. must be able to file a 1099-MISC using the federal Form W-2 and the firm's W-2 must indicate that the firm paid her consulting fees on Form 1099-MISC. Massachusetts law requires the firm to file a Form 1099-MISC if they paid M.D. 200 or more in consulting fees. In this example, M.D. must be able to file both Form 1099-MISC for both consulting services and for the consulting fees. If an investment firm, such a mutual fund or other retirement fund, pays you 2,000/month and not more than 200/month, it must withhold state and federal income and FICA tax from your monthly pay until you file a 1099-MISC.

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