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1 1099 Reporting on Vouchers. IRS 1099s the Basics is the new 1099 What is a 1099? It is.

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Presentation on theme: "1 1099 Reporting on Vouchers. IRS 1099s the Basics is the new 1099 What is a 1099? It is."— Presentation transcript:

1 Reporting on Vouchers

2 IRS 1099s the Basics is the new 1099 What is a 1099? It is an informational return to report various type of income other than wages. The IRS requires the state to issue 1099s to reportable entities for services, rentals, awards, certain type of grants, interest, dividends, and certain real estate purchases. D of A submits 5 types of 1099 (see coding guide at the end) –1099-MISC: Services, rents, awards –1099-G: Governmental payments (tax refunds are the Dept of Revenue) –1099-INT: Interest –1099-DIV: Dividends –1099-S: Real estate 2 things must occur for there to be 1099 reporting: –The entity must be subject to 1099 reporting –The payment must be reportable 2

3 Is the vendor 1099 reportable? If the vendor is not set up in SMART you must obtain a W-9 What entities are NOT (currently) reportable: –Corporations are NOT reportable UNLESS they provide medical or legal services –Governments –Tax Exempt Organizations What vendors are reportable: everyone else. LLC stands for Limited Liability company. The federal government does not recognize an LLC as a classification for federal tax purposes. An LLC can be a corporation, partnership or sole proprietorship. 3

4 Vendor file and 1099 reporting You must check the withholding box on the vendor Identifying Information tab if the vendor is subject to 1099 reporting Setting up the 1099 types and class –Each location needs the 1099 set up –The default type and class will initially populate on the voucher –Each location should only have one default type –Set up all the classes you anticipate the vendor needing 4

5 Is the voucher reportable Reportable: 01 Rental 02 Royalties 03 Prizes, Awards, other 06 Medical, including medical laboratory service 07 Services including legal 14 Gross Proceeds –payments made to an attorney as part of a legal settlement or court order. –Gross proceeds may be issued in the names of the attorney and the client. –Gross proceeds may include an amount for the attorney’s services. –If you can determine the amount of attorney fees included in the gross proceeds, report the fee in box 7 and nothing in box 14. Not Reportable: –Commodities and refunds (other than the Dept of Revenue tax refunds) 5

6 Vouchers for reportable vendors Online entry defaults with withholding turned on and the default 1099 type and class. Vouchers uploaded via INF02 with the WTHD_SW field blank, T, or Y have withholding turned on, with the default 1099 type and class. How do you remove withholding on a payment voucher? –If you upload vouchers via INF02 enter N in the WTHD_SW field for each invoice line that should not have withholding. –If you key vouchers on-line, click the Invoice Information tab on the voucher. Click the withholding link on the right hand side of the voucher. 6

7 1099 reportable vouchers For each invoice line that withholding is NOT applicable uncheck the green checkmark on the Withholding applicable box, and the Applicable box (two checks per invoice line). Click “back to invoice”, save the voucher. 7

8 Voucher 1099 reporting is by invoice line. All distribution lines for a invoice line will have the same 1099 reporting. Change the withholding code for each line as appropriate. If you select a vendor type and class that is not set up, the payment will suspend, and Melissa will have to correct it. Please contact the vendor team to change/add 1099 classes. con 8

9 1099 Account code guide 9 SMART AccountSTARS EsobjTitle1099 TYPE1099 ClassNotes REPROGRAPHIC EQUIPMENT RENTAL BUILDING SPACE RENTAL EQUIPMENT RENTAL LAND RENTAL INFORMATION PROCESSING EQUIPMENT RENTAL INFORMATION PROCESSING SOFTWARE RENTAL OTHER RENTALS REPAIR AND SERVICE - PASSENGER CARS REPAIR AND SERVICE - OTHER SELF-PROPELLED EQUIP REPAIR AND SERVICE - MACHINERY,EQUIPMENT,FURNIT REPAIR AND SERVICE - BUILDINGS AND GROUNDS REPAIR AND SERVICE-HIGHWAYS AND BRIDGES (276, INFORMATION PROCESSING EQUIPMENT REPAIR & SERVI INFORMATION PROCESSING EQPT SOFTWARE MAINT & SE REPAIR AND SERVICE - NOT OTHERWISE CLASSED HIRE OF CARS, PLANES, BUSES FOR IN-STATE TRAVEL109901Taxable if paid direct to vendor STATE CAR EXPENSE FOR IN-STATE TRAVELsee note Repairs are taxable if paid direct to vendor, supplies are not RAIL, PLANE, BUS FARES - IN-STATE TRAVEL109907Taxable if paid direct to vendor LODGING109901Taxable if paid direct to vendor NONSUBSISTENCE ITEMS FOR IN-STATE TRAVELsee note Taxable if paid direct to vendor; conference registration 1099 class HIRE OF CARS, PLANES, BUSES - OUT-OF-STATE TRAVEL109901Taxable if paid direct to vendor STATE CAR EXPENSE FOR OUT-OF-STATE TRAVELsee note Repairs are taxable if paid direct to vendor, supplies are not RAIL, PLANE, BUS FARES - OUT-OF-STATE TRAVEL109907Taxable if paid direct to vendor LODGING109901Taxable if paid direct to vendor NONSUBSISTENCE ITEMS FOR OUT-0F-STATE TRAVELsee note Taxable if paid direct to vendor; conference registration 1099 class HIRE OF CARS, PLANES, BUSES - INTERNATIONAL TRAVEL109901Taxable if paid direct to vendor STATE CAR EXPENSE FOR INTERNATIONAL TRAVELsee note Taxable if paid direct to vendor RAIL, PLANE, BUS FARES - INTERNATIONAL TRAVEL Repairs are taxable if paid direct to vendor, supplies are not

10 1099 Account code guide pt SMART Account STARS EsobjTitle 1099 TYPE 1099 ClassNotes LODGING109901Taxable if paid direct to vendor NONSUBSISTENCE ITEMS FOR INTERNATIONAL TRAVELvaries Taxable if paid direct to vendor HONORARIUMS109907in some cases could be class COMPUTER PROG AND DATA PROCESS-VENDORS O/T DISC DATABASE ACCESS FEES-VENDORS OTHER THAN DISC RECORDING FEES, SERVICING, AND COURT COSTS LABORATORY FEES BOARDING HOME PAYMENTS MAINTENANCE AND TUITION FOR REHABILITATION CLIE OTHER FEES CREDIT CARD FEES AND CHARGES BANK FEES CHARGED BY CONTRACTOR BANKS-REIM TREAS E-CHECKS FEES AND CHARGES MILITARY ACTIVATION PAYMENT ARCHITECTS AND ENGINEERS ATTORNEYS AND LAWYERS PHYSICIANS AND MEDICAL ASSOCIATIONS HOSPITALS AND NURSING HOMES ADVERTISING AGENCIES VETERINARIANS LECTURERS, SPEAKERS AND ENTERTAINERS ACCOUNTANTS AND AUDITORS INFORMATION SYSTEMS CONSULTING FEES ADMINISTRATIVE SERVICES professional services LAUNDRY, DRY CLEANING AND TOWEL SERVICE NON-EMPL REWARDS,PREMIUMS & BOUNTIES-IRS REPORT BUILDINGS AND IMPROVEMENTS BUILDINGS AND IMPROVEMENTS- NON-INVENTORY LAND AND INTEREST IN LAND1099S01Reportable if Agency is Closing Agent LAND AND INTEREST IN LAND - NON-INVENTORY1099S01Reportable if Agency is Closing Agent

11 1099 Account code guide pt SMART Account STARS EsobjTitle 1099 TYPE 1099 ClassNotes BLDGS & GRNDS- LAND IMPROVE (CAPITAL/INV) IRS BLDGS & GRNDS- LAND IMPROVE (CAPITAL/NONINV) IR INTEREST INCOME ON UNCLAIMED PROPERTY (670 ONLY1099I DIVIDEND INCOME ON UNCLAIMED PROPERTY (670 ONLY1099D ROYALTY INCOME ON UNCLAIMED PROPERTY (670 ONLY) PROMPT PAYMENT ACT INTEREST PENALTIES1099I STATE WELF ASST-RENT,SETOFF,IRS REP(171 & 629 O STATE WELF ASST-MED&HLTH PAY IRS REP(039,171, FED WELFARE ASST-RENT,SETOFF,IRS REP(171, 629 O FED WELF ASST-MED&HLTH PAY SETOFF IRS REP(039, HOUSING ASSISTNCE PAYMNTS-DEBT SETOFF IRS REPOR ROYALTY PAYMENTS KANSAS BREEDING DEVELOPMENT SUPPLEMENTS(553 ONL INT INCOME:APPL DEP REF(553),BUS TAX REF(565) O1099I AGRICULTURAL CONSERVATION PROG PMTS(634 ONLY)1099G06

12 Account codes with more than one type or class 12 SMART AccountTitle1099 TYPE 1099 ClassNotes WORKERS' COMPENSATION CLAIMS(AGENCY 173 & 331 ONLY Not reportable GROSS PROCEEDS PAYMENTS TO ATTORNEYS FOR WORKERS Reportable CIVIL RIGHTS CONCILIATION CLAIMS GROSS PROCEEDS PAYMENTS TO ATTORNEYS FOR CIVIL OTHER CLAIMS GROSS PROCEEDS PAYMENTS TO ATTORNEYS FOR OTHER OTHER CLAIMS - NON WAGE PAYMENTS DIRECT STATE WELFARE ASSISTANCE (AGY 039,629 ON STATE WELFARE ASSISTANCE-NOT SETOFF,NOT IRS REPORT none STATE WELF ASST-SETOFF,IRS REP(171 & 629 ONLY) DIRECT STATE WELFARE ASSISTANCE-SETOFF,NOT IRS REP none DIRECT FED WELFARE ASST-AGY 039,171,629 ONLY FEDERAL WELFARE ASSISTANCE-NOT SETOFF,NOT IRS REPO FED WELFARE ASST-SETOFF,IRS REP(171, & 629 ONLY FEDERAL WELFARE ASSISTANCE-SETOFF,NOT IRS REP OTHER STATE SPECIAL GRANTS (206,300,350,629,683) OTHER SPECIAL GRANTS-IRS REPORTABLE1099G OTHER SPECIAL GRANTS-IRS REPORTABLE1099G OTHER SPECIAL GRANTS-IRS REP MED & HLTH PAYMENTS1099G NON-EMPL REWARDS,PREMIUMS & BOUNTIES-IRS REPORTABL NON-EMPL AWARDS,REWARDS,PREMIUMS &BOUNTIES-NOT IRS


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