1099-NEC correction guidance

If you've already paid a domestic contractor outside of Gusto, you can still add the payment to Gusto for reporting purposes. 

To do so, head to this article and follow the steps in the dropdown titled Record or adjust a historical contractor payment processed outside of Gusto.

If Form 1099 is still a draft (meaning it hasn’t yet been filed) in Gusto, making updates to the name, SSN, or EIN will automatically update the contractor’s draft Form 1099, within 24-48 hours. 

• If the form hasn’t been updated within two business days, contact us from the Help section of your account (or Dedicated support section for Concierge and Select customers).

If the forms have already been finalized, administrators will need to:

• Update the information on the contractor’s behalf.
• Contact Gusto from the Help section of your account to request a corrected Form 1099-NEC with the updated information.

If Form 1099-NEC is still a draft in Gusto

Use the dropdown above titled "Record or adjust a historical contractor payment processed outside of Gusto" to get instructions for how to update the annual payment total.

If Form 1099-NEC is finalized

Administrators can still correct year-to-date contractor payment amounts on Form 1099-NEC and generate a corrected 1099 automatically.

1. Sign in to your admin profile.
2. Click the Taxes & compliance section and select Tax documents.
3. Click the 1099s tab.
4. Next to “Form 1099: 20XX”, click the three-dot Actions menu.
5. Click Submit a correction.
6. Select the contractor who needs a corrected Form 1099.
7. Enter the new income amount(s) to record on the corrected form
   • This will correct Boxes 1 and 7 on Form 1099-NEC. 
8. To remove an existing state, put $0 as the “Corrected state income amount.”
9. To add a state, click Add a state and enter the income amount.
10. Review the total corrected non-employee compensation (Box 1 total).
11. Click Save & continue to review.
12. Review all information. 
    • Once the correction is submitted, we’ll generate a corrected Form 1099 for you to download and give to your contractor.
    • We’ll file the new form with the IRS in 1-2 weeks. You’re able to cancel the correction up until the time the form is officially filed.
    • Important: some state agencies require you to file corrected From 1099s with them directly (in addition to the filing Gusto submits to the IRS). Gusto doesn’t file corrected Form 1099s to state agencies on your behalf–contact the states directly to learn how to file the form outside of Gusto.
13. Let us know if you want us to notify your contractor that a corrected Form 1099 is in their Gusto account.
14. Click Submit correction.

Download the form and give it to your contractor. If they have a Gusto account, they can access the corrected Form 1099 in their Documents section.

We recommend advising your contractor to wait to file their personal tax returns until Gusto has officially filed the corrected form with the IRS.

If you need to file a corrected Form 1099-NEC with a state that requires them to be filed, contact the states directly to learn how to file the form outside of Gusto.

Cancel a pending corrected Form 1099-NEC

1. Click the People section and select Team members.
2. Locate the contractor profile you need to cancel the correction for.
   • Pro tip: if you don’t see them listed in the active contractors, click Show dismissed people.
3. Go to the Documents tab of the contractor’s profile.
4. Next to “Form 1099 (Corrected): 20XX”, click the three-dot Actions menu.
5. Click Cancel correction.
   • This action cannot be undone. You’ll need to initiate a new correction if amounts are still incorrect.
6. Click Yes, Cancel this correction.

Contact us from the Help section of your account and let us know if you’d like us to stop one or more 1099 filings. 

We’ll need the name(s) of the contractor(s) you’d like to stop the filing(s) for.