1099 is the name of the form used to report vendor payments to the United States' Internal Revenue Service. 1099s are required for payments made to for-profit, non-incorporated organizations (or persons) doing business in the United States.
This topic provides background information about creating and printing 1099s. See 1099 FAQs for more information.
The Create 1099 Information screen creates 1099 information for all vendors designated as 1099 vendors.
You select a vendor for 1099 status by selecting the Print 1099-MISC Form check box in the 1099s group box on the Header tab of the Manage Vendors screen.
This process uses dynamic worktables. Because these tables are user-specified and are deleted after the process is over and data has been transferred to a permanent table, each user can only run one Create 1099 Information process at a time. Multiple users, however, can create 1099 information simultaneously, as long as they are logged in under different user names.
Because not all main vendors receive payments (some vouchers destined for main vendors are paid to subsidiaries or third parties), Costpoint calculates 1099 income by pay vendor.
You define pay vendors on the Defaults tab of the Manage Vendors screen. If you make payments to a vendor through a subsidiary or third party, you entered the subsidiary or third party's ID in the Pay Vendor field of that tab. Otherwise, the main vendor is also considered the pay vendor.
Calculating income on a pay vendor basis rather than on a main vendor basis ensures that all check payments related to a 1099 vendor are taken into account.
Costpoint uses the following process to calculate 1099 income:
The creation program first checks the Vendor Check History table, to identify all the pay vendors in the range that had payments for the current year.
Costpoint eliminates non-1099 vendors.
Costpoint then identifies which checks were paid to these pay vendors in both the current year and in prior years. This allows the creation process to account for partial payments that might have occurred in two different years (for example, if a $40 check was paid on a $100 voucher in 2011 and a $60 check was paid on the same voucher in 2010).
After Costpoint totals the amounts of these checks by voucher, it retrieves all voucher line amounts containing a Y in the 1099 column from the Voucher Line Account History table and totals the 1099 amount of each voucher.
After these amounts are totaled, the process identifies the cash organizations from which the 1099 vendors were paid, and uses these cash organizations to map the pay vendors back to the proper company.
At the end of the retrieval process, Costpoint has three amounts from which to calculate 1099 income:
The total amount of all current year checks by voucher
The total amount of all prior year checks by voucher
The total amount of all 1099 lines on the voucher.
In the case of partial payments on vouchers that include both 1099 and non-1099 income, Costpoint always assumes that 1099 income is paid first. Therefore, Costpoint assumes that any prior year payment was made as 1099 income and was recorded on the 1099 for that year.
To avoid overcharging, Costpoint subtracts any prior year check amounts from the total amount of current year income. Then it compares this amount to the total amount of the current year checks, and uses the lower number as 1099 income. By using the lower amount, Costpoint ensures that only income received by the vendor (the current year check payments) is counted as 1099 income, even if the amount of income listed on the voucher is greater than what was paid.
If the current year's check amount is greater than the total 1099 income, using the lower number ensures that only 1099 income is included and non-1099 income is excluded.
Costpoint does not create 1099 information for vendors if the amount of income, after subtracting prior year payments, is negative or zero. A negative number or a zero would mean that all 1099 items had already been included on the prior year's 1099.
If you need to change or view any of the 1099 information created by Costpoint, you can do so on the Edit 1099 Information screen.
See 1099 Income Calculation Examples for illustrations of how Costpoint calculates 1099s.
Use the Print/Create 1099s and Magnetic Media screen to print 1099s only for vendors who have $600 or more of rents or other, medical, or miscellaneous income or who have $10.00 or more of royalty income. When Costpoint finishes printing 1099s, it displays a message with the final quantity and total amount of 1099s printed. This is the only opportunity that you have to view this information.
Although you can create 1099 information for past or future years, Costpoint prints 1099s using the current year 1099 printing format. The Print 1099s program prints 1099 information onto pre-printed, official forms for either laser or impact (dot matrix or line) printers.
Costpoint prints information into the following fields on the 1099 form:
Payer's Name, Street Address, State/Province, and Postal Code — Your company name, street address, state/province, and postal code from the Taxable Entity table print in this field. Only the first line of the company street address that you entered on the Configure Company Information screen prints on the form. Before you print 1099s, you should check the address listed for the company in that screen to make sure that Address Line 1 contains all necessary street address information.
Payer's Federal Identification Number — Your company's tax ID stored in the Taxable Entity table prints in this field. The company's tax ID was originally entered on the Set Up Company screen.
Recipient's Identification Number — The vendor's tax ID stored in the 1099 table prints in this field. The vendor's tax ID was originally entered in the 1099s group box on the Header tab of the Manage Vendors screen.
Recipient's Name — The vendor short name stored in the 1099 table prints in this field. The vendor short name was originally entered on the Manage Vendors screen.
Street Address (including apartment number) — The first line of the vendor address stored in the Vendor Address table prints in this field. If there are no addresses for the vendor on the Manage Vendors screen, this field on the form is blank. Before printing 1099s, we recommend that you review address information for your 1099 vendors using the Manage Vendors screen or the Print Vendor Information Reports screen. If you change a vendor's address code, edit the Address Code on the Edit 1099 Information screen or recreate 1099 information for the vendor.
City, State/Province, and Postal Code — The city, state/province, and postal code stored in the Vendor Address table print in this field. These address elements were originally entered on the Manage Vendors screen.
Account Number (optional) — The Vendor ID from the 1099 table prints in this field. The vendor ID was originally entered on the Manage Vendors screen.
1099 amounts — The amount of 1099 income from the 1099 table prints in this field. Before printing 1099s, you should use the Edit 1099 Information screen and the Print 1099 Edit Report screen to ensure that this amount was correct. The type of 1099 income (rents, medical, other, etc.) prints in the appropriate box.
For printed (not magnetic media) 1099s, you must submit full sheets (three forms to a page) to the IRS. If your final sheet on a print run has fewer than three 1099s, you must place an X in the void box for each blank 1099.