Last Updated on November 26, 2022 by Anda Malescu
The article discusses a new rule that requires Florida businesses to report payments to independent contractors effective October 1. 2021.
Florida businesses are now required to submit new hire information for their independent contractors, also called 1099 employees by some, to the Florida Department of Revenue.
Who is this rule addressed to?
The rule applies to Florida companies that have paid an independent contractor $600 or more during a calendar year.
The new law now requires businesses in the state of Florida to submit new hire information within 20 days following their first payment to the independent contractor or the date on which the business and independent contractor entered into a contract, whichever is earlier.
This is a significant change in reporting requirements for Florida businesses that previously were unburdened by any state reporting requirements for their independent contractors. The new law became effective on October 1, 2021.
The independent contractor reporting requirement comes from a law which Florida Governor Ron DeSantis signed into law on 16 June 2021. The law’s requirements went into effect on October 1, 2021.
The new Florida law amends the Florida Statutes concerning the State Directory of New Hires. The law now requires any recipient of services in Florida to submit a report to the State Directory of New Hires for each individual who is not officially an employee but who is paid $600 or more per calendar year for services.
Previously, the state of Florida only required businesses to provide a report to the State Directory of New Hires for their employees paid under W2, while it was optional for businesses to provide the same information for their independent contractors.
The new law applies to any “service recipient” where “service recipient” is defined as “a person engaged in a trade or business who pays an individual for services rendered in the course of such trade or business.” Therefore, the new reporting requirement extends beyond formally registered businesses, including solo proprietors who hire independent contractors.
The report must include the (i) name, (ii) address, (iii) social security number or other identifying number assigned to the individual, (iv) the date services for payment were first rendered by the individual, and (v) the name, address, and employer identification number (EIN) of the service recipient.
This new Florida law was created to improve Florida’s child-support collection system. Under the new law, the reporting requirements for both employees that receive W2 and independent contractors that receive 1099 are substantially the same.
If you have paid an individual that is not an employee $600 or more during a calendar year, and need to determine your reporting requirements under Florida law, contact us, your trusted business law firm, or book a consultation business lawyers in Miami Florida USA.
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