; (II) by striking An employer and inserting the following: (i) Employees An employer that has employees ; (III) by inserting (i) after subparagraph (A) each place it appears; (IV) by striking the second sentence; and (V) by adding at the end the following: (ii) Nonemployees A service-recipient required to make returns in accordance with section 6041A(a) of the Internal Revenue Code with respect to nonemployees located in 2 or more States and that transmits reports magnetically or electronically may comply with subparagraph (A)(ii) by designating 1 State in which any such nonemployee is located to which the service-recipient will transmit the report described in subparagraph (A)(ii), and transmitting such report to such State. (iii) Designation Any employer or service-recipient that transmits reports pursuant to this subparagraph shall notify the Secretary in writing as to which State such employer or service-recipient designates for the purpose of sending reports. ; and (iii) in subparagraph (C)— (I) in the subparagraph heading, by striking employers ; and (II) by striking report and inserting reports ; and (C) in paragraph (2)— (i) in the matter that precedes subparagraph (A), by striking with respect to an employee ; (ii) in subparagraph (A)— (I) by inserting with respect to an employee, before not later than 20 days ; and (II) by striking or after the semicolon; (iii) by redesignating subparagraph (B) as subparagraph (C); (iv) by inserting after subparagraph (A) the following new subparagraph: (B) with respect to a nonemployee, not later than 20 days after the earlier of— (i) first making payments as a consequence of which a return in accordance with section 6041A(a) of the Internal Revenue Code of 1986 is required to be made; or (ii) entering into a contract providing for such payments; or ; and (v) in subparagraph (C), as redesignated by clause (iii), by striking in the case of an employer transmitting reports and inserting in the case of reports transmitted