Reporting Transactions as 1099 Liable in the US

The Internal Revenue Service (IRS) requires one or more versions of the 1099 tax form for payments to vendors. Copies of these forms must be sent to vendors annually on or before the last day of January. On your purchase documents, you can specify that the document is 1099 liable, and you can specify the 1099 code for the vendor.

Regulatory 1099 Format Changes December 2020

In Business Central, the new 1099 Form Box codes NEC-01 and MISC-14, and a new form, Vendor 1099 Nec, have been added. The additions are relevant for the reporting year 2020. Before you submit your reporting for 2020, you must first upgrade your Business Central to handle the new requirements. To get this update, you must run the action Update Form Boxes on the 1099 Form-Boxes page.

Important

Running the action Update Form Boxes makes reporing for 2019 impossible, since some boxes change their meaning. Make sure that you have done all of your reporting for 2019 before you update the form boxes to prepare your system for reporting for 2020.

Regulatory 1099 Format Changes December 2018

In Business Central, a new 1099 Form Box code DIV-05 has been added, and all the 1099 codes from DIV-05 to DIV-11 were upgraded to codes from DIV-06 to DIV-12. When you open the IRS 1099 Form Box page, a notification pops up to upgrade the form boxes. If you change the 1099 code on the Vendor Card page, a notification will display asking if you want to update the 1099 codes for all the associated entries (like purchase documents, journal lines, posted invoices, credit memos and vendor ledger entries).

1099 codes

In Business Central, the most common 1099 codes are already set up for you so you are ready to generate the required reports. The codes are defined on the IRS 1099 Form Box page where you can also add new 1099 codes. For each tax liable vendor, you can then specify the relevant 1099 code on the Payments FastTab on the Vendor card.

With the Vendor 1099 Information report, you can review 1099 transactions paid during a specified period. At the end of the year, you can print 1099 transactions on preprinted forms.

Printing 1099 tax forms

From the IRS 1099 Form Box page, you can access the following tax forms:

Vendor 1099 Div - Prints the federal form 1099-DIV for dividends and distribution. You can print all or specific 1099-DIV forms. The report uses the codes that apply to the DIV form amount boxes from the IRS 1099 Form-Box page.
Vendor 1099 Int - Prints the federal form 1099-INT for interest income. You can print all or specific 1099-INT forms. The report uses the codes that apply to the INT form amount boxes from the IRS 1099 Form-Box page.
Vendor 1099 Misc - Miscellaneous income - Prints the federal form 1099-MISC for miscellaneous income. You can print all or specific 1099-MISC forms. The report uses the codes that apply to the MISC form amount boxes from the IRS 1099 Form-Box page.
Vendor 1099 NEC – Non-employee compensation – Prints the federal form 1099-NEC for nonemployee compensation. You can print all or specific 1099-NEC forms. The report uses the codes that apply to the NEC form amount boxes from the IRS 1099 Form-Box page.

Regulatory changes affecting this report and the table data are generally handled in end-of-year updates. It may be helpful to run the Vendor 1099 Information report to review the data before printing the forms.

Submitting 1099 tax forms electronically

To submit the 1099 tax forms electronically, use the Vendor 1099 Magnetic report. Specifies the 1099 forms that can be exported. The form information exported by this report is the same as the reports that print 1099 forms that are described in the previous section.

The report uses the codes that apply to the form amount boxes from the IRS 1099 Form-Box page. The codes are mapped to the form boxes in the file layouts of this report, therefore the table data and report version for a particular tax year must be in agreement. If any custom codes are added to the table these must be mapped to the form boxes inside this object.