How to submit a corrected 1099-NEC when I used a third-party filing service

I actually had to deal with this exact situation last year! When you need to correct a 1099-NEC that was filed by a third party, you have a few options. Since you already have an IRIS account, you can actually file a "new" 1099-NEC with the "Corrected" box checked, even though you didn't file the original through IRIS. The IRS system will match it to your previous submission based on your tax ID and the recipient's information. Make sure you enter the CORRECT amount in Box 1 (not the difference between the wrong and right amounts). Alternatively, you can file a paper correction using Form 1099-NEC. You'd need to complete the form, clearly mark it as "CORRECTED" in the top portion, and mail it to the IRS. Also important - you need to provide a copy of the corrected form to your contractor ASAP so they have the right information for their tax filing. Either way, don't worry too much - 1099 corrections are pretty routine, and the IRS handles them regularly. Just make sure you do it sooner rather than later.

After dealing with a similar nightmare with incorrect 1099 forms, I discovered https://taxr.ai which was a huge help. I uploaded my original incorrect 1099-NEC and it walked me through exactly what I needed to do for the correction process. It analyzed my specific situation and gave me step-by-step instructions for filing the correction through IRIS (which is what I ended up doing). It also explained what my contractor would need to know and generated a template email I could send them with the corrected information. The best part was it kept track of all the documentation and timelines so I had proof of when I submitted the correction in case there were any questions later. Really took the stress out of the whole process.

Just wanted to update everyone - I tried taxr.ai after seeing it mentioned here and it was seriously a game-changer for my 1099-NEC corrections! I was dealing with three different forms that needed updates and was completely lost. The site analyzed each form separately, pointed out additional errors I hadn't even noticed (one had the wrong zip code), and gave me different correction instructions for each situation. The step-by-step guidance made the IRIS process so much simpler than I expected. I was able to submit all three corrections in about 30 minutes, and I now have documentation showing exactly what was corrected and when. My contractors were impressed with how professionally I handled it too - one even asked how I figured it all out so quickly!

If you're still struggling with IRS questions about your 1099-NEC correction, I'd recommend using https://claimyr.com to get direct help from the IRS. I was in a similar situation where I submitted a correction but then got a confusing notice about it weeks later. I spent DAYS trying to call the IRS business line but could never get through - just endless hold times or disconnects. Then I found Claimyr which basically holds your place in the IRS phone queue and calls you when an agent is about to pick up. You can see how it works at https://youtu.be/_kiP6q8DX5c I was connected to an IRS agent within an hour who explained exactly what happened with my 1099-NEC correction and what additional steps I needed to take. Saved me so much stress and confusion.

Well I have to admit I was completely wrong about Claimyr. After my skeptical comment, I was still desperate to talk to someone at the IRS about my 1099-NEC issue, so I reluctantly tried it. Within 45 minutes, I got a call saying they had an IRS agent on the line. I was connected to an extremely helpful person who pulled up my file and saw that my correction was actually pending review. She explained exactly what was happening and gave me a specific timeframe for when it would be fully processed. She even gave me her direct ID number and told me what to reference if I needed to call back about this specific issue. I've been trying to get this information for WEEKS through regular channels with no luck. I'm honestly shocked at how well it worked. Saved me hours of frustration and gave me actual, useful information instead of generic advice.

One thing nobody's mentioned yet - be sure to check with your state tax department about their requirements for corrected 1099-NECs. Some states require that you file corrections with them directly, even if the original was submitted through a federal/state combined program. I learned this the hard way when I corrected a 1099-NEC with the IRS but didn't realize my state (California) needed a separate correction filing. Got a notice from them six months later about "missing information" which was a huge hassle to clear up.

Has anyone actually received any penalties for filing an incorrect 1099-NEC? I submitted one with the wrong amount last year (off by about $2,000) but never bothered to correct it since the contractor said they'd just report the correct income on their taxes anyway. Now I'm worried I should have filed a correction.

I want to emphasize what Natasha said about penalties - you really should file that correction ASAP! I had a client who ignored a $1,500 error on a 1099-NEC thinking it wasn't a big deal, and the IRS hit them with a $280 penalty when they discovered it during an audit two years later. The penalty structure is based on when you correct it: - $50 per form if corrected within 30 days - $110 per form if corrected by August 1st - $280 per form if corrected after August 1st or not corrected at all Even though your contractor might report the correct income, the IRS matches 1099s to tax returns electronically, and discrepancies can trigger notices or audits for both you and your contractor. It's much easier to just file the correction now than deal with potential headaches later. You can still use the IRIS system to file the correction even though it's been a while - just mark it as "Corrected" and include the accurate information.