1099 Processing Options and Controls (1099P)

The first time, the Offline 1099 Process is executed for a calendar year, the 1099 Reporting Journal must be used as input. Unless the processing mode is Report, a record is created on the 1099R table for each CY, 1099 Reporting payer, TIN, TIN Type, Form Type, and 1099-S Form Number that has reportable income on the 1099 Reporting Journal.  If the 1099ER table is populated and the parameter is set to 1(Yes), it may also be used as input to update the 1099ER table. Records from the 1099 Journal will not be added to the 1099ER table nor will records from the 1099ER table be added to the 1099R or 1042R tables. Records on 1099ER are processed separately. If the 1042-S Withholding flag is checked on 1099P, records are added to the 1042-S Reporting Income (1042R) table for each CY, 1099 Reporting Payer, TIN, TIN Type, and Income Code that has reportable income on the 1099 Reporting Journal. The Offline 1099 Process will continue to select records from the 1099 Reporting Journal as long as the 1099 Journal as Input check box is set to true on the 1099P table.

After the process is executed in Testing mode, users should procedurally set the 1099 Journal as Input check box to false on the 1099P table. If this does not occur, the records on the 1099R and 1042R tables will be initialized and the 1099 Journal will be used as input. If the job is run in Magnetic Media mode with the 1099 Journal as Input checked there will only be records with the Processing Indicator of Magnetic Media on both 1099R and 1042R, all previous records will be deleted.

Once the process runs in Test, Forms, and/or Magnetic Media modes, procedurally any necessary corrections are applied to the current record on the 1099R, 1099ER, or 1042R tables.  Therefore, those tables are used as input for any further executions of the Offline 1099 Process as the 1099 Journal as Input check box must be set to false for Corrected Mode.  A new record is created on 1099R, 1099ER or 1042R for each record processed (based on the Processing Mode and Input criteria).  The only exception occurs when the input record has a Processing Indicator of New or Updated.  In this case, no new record is added, but instead the Generation Date and Processing Indicator are updated on the existing record.  If the Processing Indicator is New or Updated, multiple changes can be applied to the record using the Edit Reported Income link.

If the 1099-S Reporting indicator on 1099P is set to Property, 1099-S records will not be inserted onto 1099R by the Offline 1099 Process.  In this case, all of the 1099-S records must be added to 1099R manually using the 1099 Maintenance (M1099) transaction or directly onto the 1099R table using the Add New 1099 Reported Income link.  Each property added will be tracked by the 1099-S Form Number allowing multiple records for the same 1099 Reporting Payer, TIN and TIN Type for 1099-S forms. If the 1099-S Transactions by Vendor Report check box is selected, a report will be produced to aid in data entry of the 1099-S records. However, if the 1099-S Reporting indicator on 1099P is set to TIN/TIN Type then 1099-S records will be inserted onto 1099R by the Offline 1099 Process for each CY, 1099 Reporting Payer, TIN, TIN Type, Form Type, and 1099-S Form Number. If text is not provided in the Form 1099-S, Box 3 field on 1099RP, Box 3 of all 1099-S records will default to 0.00 unless sites manually update the address or property description for 1099-S, Box 3 to meet the IRS requirement for the 1099-S reporting.

The Last Processing Mode field on the 1099 Processing Parameters window indicates in what mode the Offline 1099 Process was previously executed.  This indicator is initially [spaces] and gets updated by the Offline 1099 process with the corresponding processing mode.  When the indicator is [spaces], the Offline 1099 process uses the 1099 Journal as input.  The Last Processing Mode also determines what Processing Mode the Offline 1099 Process can be executed is as follows:

• The 1099 Backup Withholding, 1042-S Withholding, and Contract Withholding fields activate the corresponding reporting and withholding in the system. Even if your site will not impose backup withholding, these indicators are also used to evaluate and report income for reportability.

• Values in the 1099 Backup Withholding Rate, 1042-S Backup Withholding Rate, 1042-S and Chapter 4 Tax Rate will be used in Backup Withholding calculations on disbursement transactions.  The 1042-S tax rates are also used in reporting 1042-S forms as default backup withholding rates.

• 1099 Backup Withholding, IRS Penalty Amount, and Compliance Days fields are used by the Backup Withholding batch process for the printed B Notices.  

• The 1099-S Reporting CVL controls how 1099-S forms are produced.  The choices are by TIN/TIN Type or by Property.

• The 1099 Account Number Format CVL on 1099P controls the format of the Account Number assigned on 1099R records.  The Form Type/TIN/TIN Type/Unique Number is the default value and results in an Account Number that consists of the Form Type, TIN, TIN Type, and the next unique number from the 1099 Next Unique Number field on 1099P.  The CY/Rept Payer/Date/Unique Number results in an Account Number that consists of the Calendar Year, Reporting Payer, Date the record is added to 1099R, and the next unique number from the 1099 Next Unique Number field on 1099P.  It is also used for 1099ER records if the Account Number is blank on the input file for the Upload 1099 External Reported Income chain job.

• 1099 Next Unique Number indicates the next unique number to be used for the generated Account Number for 1099 records.

• 1042-S Next Unique Form Identifier is a system-generated number that uniquely identifies each 1042-S information return. This is a required field on all 1042-S forms for Calendar Year 2017 and later. This is a 10-character, numeric, protected field, with a format of CCYYNNNNNN. For example, the value of this field is automatically set to 2017000001 for Calendar Year 2017 on the 1099 Processing Options and Controls (1099P) page. Each time a record is added to the 1042-S Reported Income (1042R) page via the Offline 1099 Process or manually, the system will infer the value from the Next 1042-S Unique Form Identifier field on 1099P to the Next Unique Number field on 1042R and will increase the Next 1042-S Unique Form Identifier by 1 on 1099P.

• IRS Penalty Amount allows each site to specify the penalty amount on the 1st and 2nd B Notices for vendors that are subject to Backup Withholding

• Compliance Days allows each site to define the time limit in days that the Taxpayer has in order to return information that was requested in the 1st or 2nd “B” Notices.

• The number of days specified in this field will be used as a selection criterion by the Initiate Backup Withholding process to select records from the 1099 Reporting Information table, for which the number of days since the 1st or 2nd “B” Notice was sent, is greater than or equal to the number of Compliance Days. The calculated date will exclude weekends and holidays as defined on CLDT table.

• This field will also be used by the Print Backup Withholding Notices batch process during the record processing. This process populates the Backup Withholding Notice Printing History table with information about vendors, for which the 1st or 2nd “B” Notice has been generated. The number of days specified in the ‘Compliance Days’ field will be added to the Application Control Date and this date will be populated by the batch process in the ‘Compliance Date’ field on the BWNPH table. The calculated date will exclude weekends and holidays as defined on the CLDT table. The calculation will include a verification to ensure that the last prior business day is selected if the ‘Compliance Date’ falls on weekends and/or holidays.

• The Contract Withholding Rate field indicates the percentage to withhold if the Contract Withholding check box is selected.

• The Contract Withholding Threshold field indicates the minimum disbursement threshold that needs to be reached in order for Advantage to determine eligibility for Contract Withholding. During Automated Disbursement, the Contract Withholding Threshold is compared to the total Line Amount less Discounts and Retainage for each payment grouping. On a manual disbursement, the Contract Withholding Threshold is compared to the vendor line amount less Discounts and Retainage.  

• The Apply Contract Withholding to PCard Payments field indicates if the site will apply contract withholding to payments made for Procurement Card activities. If this check box is selected, the disbursement process will apply Contract Withholding on PCard payments that meet the contract withholding threshold and that are not exempt from contract withholding.  A value is not allowed in this field if the Contract Withholding check box is not selected.

• ADVANTAGE Tax Reporting flag is used to indicate if the Advantage Tax Reporting functionality is being used for the Tax Year. This field cannot be set if the Tax Year is prior to 2016 as Advantage Tax Reporting functionality was not available prior to 2016. In addition to this flag, you must also set the Application Parameter (APPCTRL) of USE_ADV_TAX_REPORTING to Yes if Advantage Tax Reporting flag on this table is set to True (selected).