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1099s are being generated for less than the minimum amount designated

1099s are being generated for less than the minimum amount designated

02 28, 2020

Issue/Symptom/Question

We ran the 1099 audit report and there are three vendors that are showing up who have $ amounts under $600. 

Applies To

Accounts Payable > Year End Processing > 1099 Processing > Combined 1099 Filing State Information
Accounts Payable > Year End Processing > 1099 Processing > 1099 Generation
Payroll > Setup > Taxes > State Tax Information
System Management  > System Rules > System Configuration / AP Tab

Resolution/Fix/Answer

If you have any questions regarding the minimum amount of vendor payments to be included in the 1099 process, please review these setup steps;

1. Verify the Federal Reporting Minimum

A. Review the federal reporting limit. System Management > System Rules > System Configuration > AP tab

  1. Verify the value of the Print 1099’s Only If Amount Exceeds field is the current federal reporting minimum.

2. Close the window to commit your changes.

2. Ensure States are Active

A. Query and review reportable states. Payroll > Setup > Taxes > State Codes

  1. Query a state for which you will process 1099-MISC returns.

  2. Verify the state is active.

  3. Repeat steps 2.A.1 – 2.A.2 for all applicable states.

  4. Close the window to commit your changes.

3. Verify Tax Ids for Participating States

A. Query and review states participating in the combined filing program. Refer to current IRS publications to identify states participating in this program. Payroll > Setup > Taxes > State Tax Information

  1. Query a Legal Entity and participating State.

  2. Verify the State Tax Id# field contains the correct Tax ID for the Legal Entity.

  3. Repeat steps 3.A.1 and 3.A.2 for each Legal Entity and state you process 1099-MISC returns for.

  4. Close the window to commit your changes.

4. Define State Combined Filing Information

A. Enter combined filing minimum amount requirement for a state. Accounts Payable > 1099 Processing > Combined 1099 Filing State Information

  1. Query the desired State.

  2. Enter an Effective Date.

    1. PENTA populates the Combined 1099 Filing Participant field with Y, indicating records for this state will be included in combined format files for the tax year in which the Effective Date falls.

    2. Records will also be included in subsequent tax year files, unless you enter a deactivating record by entering a new Effective Date and overriding the participant flag to N).

  3. Enter a Minimum Amount.

  4. Refer to IRS Publication 1220 or state documentation for dollar amount reporting criteria.

  5. Repeat steps 4.A.1 – 4.A.4for each state you report to that participates in the Combined Federal/State Filing program.

  6. Close the window to commit your changes.