About 1099 Tax

The Export 1099-MISC Payments Data extension package enables you to produce a CSV file that contains all payments made to 1099-reportable vendors.

The Transaction Details for 1099 Reporting extension package contains an audit report to support any adjustments you need to make to the 1099-MISC Payments Data export file before you submit it.

See Setting up 1099 Tax for more details.

When a payable invoice for a 1099-reportable vendor is created:

  • The Income Tax Type for the payable invoice defaults to the Income Tax Type for the vendor account.
  • The Income Tax Type is not applied to individual payable invoice lines.
  • For payable invoice transaction line items where Line Type = Account, the Income Tax Type is set to vendor account's Income Tax Type.
  • For payable invoice transaction line items where Line Type = Analysis, the Income Tax Type is set to "Not Reportable".
  • The 1099-MISC Export exports a summary of payments matched to payable invoices for 1099 reportable vendors.

Known Limitations

  • If you need to edit and modify the exported 1099 data, you must do this directly in the CSV file.
  • Transactions processed prior to marking an account as 1099 reportable are not included in the export file.
  • The supplied 1099-MISC Report does not take account of any discounts or currency write-offs. The full amount before discount or write-off is reported. If you want to take advantage of this report, you must enter discounts and write-offs in the form of credit notes, not in cash matching.

Transaction Details for 1099 Reporting

The Transaction Details for 1099 Reporting report can be used to identify and support any manual adjustments to the exported payments data. The report provides details of all transactions that were paid to vendors who are currently tagged as 1099 reportable. It identifies both the Income Tax Type currently associated with each 1099 reportable account, and the Income Tax Type on the transaction account line for each transaction paid during the period.

This will help you to identify any transactions where:

  • The transaction was created before the account was flagged as 1099 reportable.
  • The Income Tax Type on the account has been modified since the transaction was created.

The report also identifies both the general ledger account and, where relevant, the product for each of the analysis lines belonging to the paid document. This will help you to apportion the total amount paid across 1099 reportable and non-reportable categories.

Implementation considerations

Payable invoices with a mix of reportable and non-reportable items

If you pay 1099 vendors for a mix of reportable and non-reportable items and wish to use the 1099-MISC Export, you must create separate payable invoices for reportable and non-reportable items.

If you do not wish to create separate payable invoices:

  • Use the 1099-MISC Export to create a draft 1099 return.
  • Adjust the entries in the draft 1099-MISC return based on details from the Transaction Details for 1099 Report.

Actions required if setup steps have been omitted in error

If you have omitted the setup steps, some vendor payments will be missing from the 1099-MISC Export. To check and correct the values, you must do the following:

  • Select the Federally Reportable 1099 checkbox for 1099 reportable vendors.
  • Use the 1099-MISC Export to create a draft 1099 return.
  • Adjust the entries in the draft 1099-MISC return based on details from the Transaction Details for 1099 Report.