Sonoma County Office of Education



Sonoma County Office of Education1099 ReportingFor2014 Calendar Year IT Department December 17, 2014Important Dates for 2014 1099 ReportingEVENT Dates Due District Responsibilities:Reviewing of Object Account Component December 10 – Jan 14** Verification of Vendor/1099 data in Production December 15 - Jan 14Vendor Record ReviewReqPay18 Review**Audit and Edit Vendor 1099 List in Production December 15 – Jan 14**Last APY Run for 2014 Backup Due by Noon December 23 - Noon**FINAL Verification of Vendor/1099 data in Production December 18 -Vendor Record Review January 14 ReqPay18 ReviewAudit and Edit Vendor 1099 List **1099 Verification Reports Due to SCOE January 14- 4:30 pm or BeforeReqPay07 ReqPay16Both Reports Must be signed by Chief Business OfficialAdditional 1099 Data Changes Requires Business Services January 14 - 261099 Printing/No new 1099 Entry allowed January 27Interim 1099 Review/Communication with SCOE January 27 – March 25 Periodic 1099 Vendor Review March – December 2015IT Responsibilities:Installation of 14.3 in Production December 14Printing of 1099 Forms January 27Printed Form 1099 Mailed to Recipients January 30 - Districts will be billed for postage via a County Transfer Vendor ClassificationSee separate 2014 Instructions for Form 1099-MiscYou must provide a 1099 Miscellaneous form for:Income of $600 or more for rents, services (including parts and materials)Medical and health care paymentsGross Proceeds of $600 or more paid to an attorneyNon-profit organizations (engaged in a trade or business)You are not required to provide a 1099 Miscellaneous form for:Generally, payments to a corporationWages paid to an employee (reported on W2)Business travel allowances (reported on W2)Payments to tax-exempt organizationsSpecial circumstances that must be reported on 1099 Miscellaneous formSee 2014 Instructions for Form 1099-MISC (separate handout) Reportable payments to Corporations include:Medical and health care payments to be reported in Box 6Attorney fees to be reported in Box 7See page 2, second columnGross proceeds paid to an attorney in Box 14 See page 2, second columnDeceased employee’s wagesSee page 3, first columnSee W2 Process Workbook, Addendum A Watch definition of Independent Contractors vs an EmployeeThree types of checkBehavioral controlFinancial controlType of relationshipTraining vs teaching staff/others Penalties/back taxes will be accessedA current, valid W9 is a mustForm will allow you to properly set up and review a vendor’s 1099 needs in a timely manner The form requires the vendor to designate their taxable statusSee separate W-9 handout You may reprint this one or download a new one from the website: 1099Please highlight the following sections on the W-9 form:Check appropriate box for tax classification (page 1)Part 1 Taxpayer Identification Number/TIN (page 1/3)You are subject to a penalty of $50 for each failure (page 2)Sole Proprietor (page 2)Limited Liability Company/LLC (page 2)However, the IRS prefers that you use your SSN (page 3, column 2)What Name and Number to Give the Requester Chart (page 4, column 1)Certain rules do apply as noted below:A 1099 vendor can have only one active Social Security number or Tax Payer Identification number for the same business for a given periodWatch for Incorporation of business during the yearWatch for the Sale of business during the yearWatch for Merger of business during the yearBest defense is a new W-9A vendor can be a sole proprietor and not be an Independent ContractorIn both cases you must have the 1099 Yes field marked A vendor that supplies you with a social security number must supply their full nameCheck early for current W-9 informationA vendor that supplies you with a EIN/TIN must give you the business nameCheck early for current W-9 informationA vendor may have changed business typesMay now need to be flagged for 1099 inclusionPrevious a 4XXX type businessAn Independent Contractor must supply you with a social security number for SB542 reporting but can be reported as a 1099 vendor with their EIN/TIN numberMake sure you understand the vendors preference A Partnership must supply one EIN/TIN number that can be associated with the business nameAn LLC must report as either a P for a partnership or a C/S for a corporation or a S corporationFines/penalties will be/have been assessed by the IRS and Business Services will be passing the amounts on to you as they occurThe IRS will send 1099 inaccuracies back to SCOE after the official 1099 filingIf the information supplies does not match you will be notifiedYou will be asked to correct and refileReview 1099 Component SetupFinance – Setup – Chart of Accounts – Account Components 543877555181500Review the 1099 form box in the Account Components activity. Designations have been made here to allow the system to automatically know anything paid to these objects will be dropped into the correct 1099 form boxes (First place Escape looks for 1099 coding)Escape then looks for payments that have been made to the object codes designated for 1099 inclusionIn all cases vendors must be set up to be reportable in the vendor recordRemember that many of the 6XXX objects should be reported6XXX usually relate to construction projectsPlease see the separate copy of the 2014 Miscellaneous Form and pages 4-9 of the 2014 Instructions for Form 1099-MiscReview the box definitions for use in the Account Component 1099 boxes noted aboveBox 1- RentsReal Estate Rentals (Not the agent)Machine Rentals (Only the actual rental fee)Box 3-Other IncomeBeneficiary of deceased employee Box 6-Medical and health paymentsNo exemption from reporting even if a corporationNot required to report drug paymentsBox 7-Nonemployee Compensation$600 or more paid for services performed by a nonemployeeCould have been to an individual, partnership, estate and in some cases a corporationAttorney fees, even if a corporation must be reported hereShould include Attorney fees onlyBox 14-Gross Proceeds Paid to an AttorneyWhen you cannot determine what part of the payment is a settlement and what part is the actual attorney’s fee To Change 1099 Object DefinitionFinance – Setup – Chart of Accounts – Account ComponentsNot all APY users will have access to the Account Component activityPlease check with the correct person in your district to make any needed changes First designation for inclusion as 1099 amountsCan be overridden at the vendor levelObject codes can be changed now and the system will go back and pick up any payments made to the new object designation when a new 1099 search is madeReview Vendor Setup Finance – Purchasing – VendorsVendor is a critical part of 1099 reviewIf you do not have access to the vendor screens, please allow time to work with the appropriate person that does have this activityReview the following:Tax Id is formatted correctlyWatch Federal and State NumbersFederal number must be associated with a company nameSocial Security numbers must reference an individual’s name1099 process first looks for the Federal Tax idSB542 first looks for the State Tax id (Independent Contractor)1099 Form Box is filled in appropriatelyVerify that this box is coded 0 (N/A) or the system will override all object designations and report all vendor payments to this one boxA vendor that has several types of payments should not have this box hardcoded to box 7 (Non-Employee compensation) or any rents would not automatically go to box 1 (Rents) 1099 Flag is set to Yes (a must to create a 1099 form)If the flag is set to no, you can change it now and then any the vendor payments will appear on all future 1099 vendor searchesReport searches can be run using this designationVerify the 1099 addressSet the default in the Address sectionIf there is no 1099 address marked the system will take the last paid address (or remit to)Watch vendor names and address that are longer than 30 digitsUse the // to separate lines (either name or address)P O Box 70049//123 Main Street will print on two linesThe IRS only allows for 40 characters on one line as a street address, while Escape allows 60 characters spread over two linesYou may want to create a separate address for 1099 remitsWatch out of country vendorsEscape Chapter 8 Vendor ManagementPage 10 has an example of vendor set upIf you are reporting a vendor with a ssn and have paid using a vendor name be sure to have a DBA vendor address (see example on previous page) Watch for business changesSole Proprietor to CorporationAdd a new vendor for the corporationNew payments to the new vendor1099 amounts may need to be alteredSee pages 11/12 of this manualBusiness saleTrade name may be the same but the taxpayer id will not beAdd a new vendor1099 amounts may need to be alteredSee pages 11/12 of this manualChange in business needsMay not have originally been flagged for 1099 inclusion4XXX now 5XXX, 6XXX business typeSuspect a business change Ask for a new W-9Adjust vendor as neededWorking the 1099 ListFinance – Processes – Tax Reporting – Vendor 1099Chapter 19, 1099 Reporting, pages 11-15Tutorial Available from Tools in upper right hand corner of Escape screenDefine your search to produce a list that addresses your current process needsFirst time search use all defaulted values (all blanks as shown below)Search criteria to watch thereafterWith ChangesYes - Only vendors that you have modified through the 1099 process will appear on the listNo - Excludes vendors from the list that have changes already made through the 1099 processBlank - Allows the list produced to include all vendors regardless of changes made to them (default)1099Yes – Produces a list of all 1099 qualified vendors and that have no errorsThe vendors are currently ready to go to the IRS as isNo – Produces a list of vendors that do not qualify to receive a 1099 for a variety of reasonsUnder the $600 limitUndefined object boxesNot flagged to receive a 1099Blank – Shows all vendors, all errors, all dollar amounts (default)Include Closed YearsYes – Gives you access to both prior closed and current year dataOnly current year 1099 data is editableNo – Gives you a listing of only current year (editable) recordsReview the produced list for any changes neededVerify that there is an identification number present for each vendorVerify TIN/EIN’s have business namesVerify any ssn’s have a individuals nameReview the list for any errors that show in the far right column of the listReview the Vendor 1099 column on the left of the report and verify that all the vendors you expected to create 1099’s for are marked with a YChanges needed must be done from either the Quick link or in the Vendor activity11715752190750040957520002500546735030035500The status field indicates if a 1099 will print Note the Blank Tax Id# Note that the list will group by error38100021844000For any highlighted line on the list, the Paper/Magnifying Glass on the tool bar will produce a 1099 snapshot No Tax Payer Identification number on the listNote that this record showed on our original list for review as the vendor was:Flagged to report on the vendor record Component involved had been set to deposit the rental dollars in Box 1 Investigating From the List/Editing DataFinance – Process – Tax Reporting – Vendor 1099Vendor changes needed must be done from either the Quick link or in the Vendor activityThe example below has 1099 Vendor turned off, tax payer id indicates a business and an amount over the $600 reporting limitSeems like one worth checking onOnce I open the line for vendor 054700 Academy Theatrical Lighting, I can then use the Quick link to take me to the vendor screen (small yellow icon)3952875317500The vendor screen then allows us to look further based on what is shown at the vendor levelIn my example I am questioning what accounts the vendor was paid fromI see no Incorporation in the vendor name and I do see that the field W9 required was set to YesThe 1099 field however is set to NoUnless this field is set to yes, no 1099 will print no matter the paid amount56007003937000I opened the Payment tab from the screen and selected the quick link for a payment I felt would show the account code 400050141922500From the payment I selected the quick link (small yellow icon) to see the actual payment screen Payment coding is one way to determine if additional review is needed If the payments should have been reported then I need to request a W9 form I may need to change the vendor screen to appropriately classify this vendorNow I can determine that the payment went to a 5899 object and should have been reported on a 1099 and make the necessary adjustmentsI should review all the payments to this vendor while I have the screens open9715504953000Normally a 1099 reportable object (5899)2952753578225Manually Adjust 1099 Form Box AmountsTo change the reportable amounts on your original 1099 list Select the vendor you need and open the record 80962516319500From the task menu drop down 8096256286500Select edit and the fields on the sample 1099 screen will openNote that only the first box in each section will openThe remaining fields are locked as those amounts came in from system generated activitiesEnter negative and /or positive adjustments I entered a positive 500.00 as this vendor had a ASB (Student Body) payment made to him outside of the normal Accounts Payable processI did not want to use the Import processExample shown on the next pageSave/Close the recordAs the 1099 list returns you can see the adjusted amounts on your listNote that with the addition of the 500.00 he will now need to have a 1099 generated and the system made the adjustment in the status field 42297351016000Manually Add a Miscellaneous Vendor AmountSelect New from the 1099 vendor list you originally created 50482563500This method can be used to add miscellaneous vendors rather than using the Import feature512445010541000As with the Import Process the Vendor must exist and be active in ESCAPEEnter the Vendor Code (Vendor must already exist)Enter all necessary 1099 data for the vendorAdjustment reason (ASB Vendor)Save/CloseFor the added vendor to now show on your 1099 vendor list, you will need to research using the Go function in the initial 1099 Vendor search screenAlways review the entry on the listThis manual vendor record still needs some editing to reportThe 1099 vendor field shows a No There is no tax payer id number available in the vendor record Both are a must for the record to be valid and reportableFollow the process outlined on page 11 of this manual to change the vendor fieldsPrint a snapshot to complete the verification if neededExample shown before the correctionsNote no vendor tax id on the form219075082549Importing 1099 AmountsChapter 19 1099 Reporting, pages 25-26 and pages 29-30Tools/TutorialNot a good process for only a few vendors (see pages 13/14 for alternative reporting method) Strongly advise viewing the TutorialWarrants issued outside of Escape need to be included in the 1099 process. This is a two-step processCreation of the CSV FileMay contain ASB, Charter Schools, Petty Cash paymentsImportation of the file into Escape Rules to rememberSee the file layout template for initial field definition for input district can have only one fileIf there was something left off the first file, the second file must contain all the previous records in addition to the new information.The last imported file information will be what’s reported on the 1099All vendors on the file must exist in Escape prior to the file importation Import all vendorsThere could be instances where once the vendor amounts are combined the vendor reaches the $600 threshold and should be reportReport Use1099 ListProcesses - Tax Reporting – Vendor 1099Can be run using the defaulted features to beginVendor name ranges available (a..g)Searches can be made for specific research goalsShows all vendors that are flagged as requiring 1099 or notShows all taxpayer id’s, present or notShows all problems associated with each vendor on the list Once changes are made to any vendors/component designation, the1099 list must be rerun to show the most current vendors to be reported Grid ListCan be run from any vendor/1099 search menu1099 SnapshotProcess – Tax Reporting –Vendor 1099A exact copy of the proposed 1099 form is available from the opened list Changes with each new 1099 vendor list search ReqPay18 Vendor Check DetailsFinance – Reports – Req/PaymentWatch tax year (calendar, not fiscal) Review report samplerProvides object detail for all payments Reqpay16 Vendor 1099 DetailFinance – Reports – Req/PaymentReview report samplerDesignate errors requested from drop down menuReqPay07 Vendor LogFinance – Reports – Req/Payment Review report samplerNew Report Warehouse for financial reportsFinance – Report WarehouseReqPay16Runs at 1099 generationOnly see your own district reportsNo deletion of reportsPermanent in natureHave you checked these items?Chapter 19, pages 19-20Every vendor record must be corrected before its 1099 can be printedVendors with errors will cause the Escape system to reject all 1099 printing requestsMost Common areas of concernTax Payer number is incorrectly formatted or missingW-9Vendor address is missing40 1099 lines characters60 Escape vendor charactersDBA VendorPayments did not reach the $600 thresholdASB/Petty cash entries madeVendor status reviewed after manual additionsThe vendor is flagged to not receive a 1099 and they should beIf their classification is "Corporation" and they provided medical or legal servicesAre the services truly considered "medical"What classification did they put on their W9Reclassification of rental paymentsObject coding is bestStale dated or cancelled warrantsEscape reports ignoreManually adjust 1099 amountsDuplicate VendorsDetermine which Vendor Record has more requisitions recorded against itInactivate the other record by changing the vendor’s active flag to NoEdit the Vendor 1099 Record of the inactive vendor, adjusting the amounts to zeroPut a note in the Adjustment Reason field referring to the other vendor’s codeEdit the Vendor 1099 Record of the active vendor, adding the amounts from the inactive vendor Put note in the Adjustment Reason field referring to the other vendor’s codeDuplicate/Multiple Tax ID’sResearch the vendor listModify the Vendor Records accordinglyNegative AmountsReview vendor to determine why the amount was negative and make an adjustment with a detailed reason in the Vendor 1099 RecordYou may have created a credit memo and used a different object code than used in the original invoiceAll of the vendors listed below are ones you should pay close attention to in determining whether or not to send them a 1099:ANOVAIf for Behavioral Assistance, not considered medicalEaster Seals Physical Therapy is not really considered medicalNPS (Non Public Schools)If marked Corporation and providing OT (Occupational Therapy)Redwood PediatricsOT is considered medicalSchool & College LegalExemptSelpaPart of SCOEWhat/When to Submit**1099 Verification Reports Due to SCOE January 14- 4:30 pm or BeforeReqPay07 ReqPay16Both Reports Must be signed by Chief Business OfficialAdditional 1099 Data Changes Requires Business Services January 15 - 251099 Printing/No new 1099 Entry allowedJanuary 26Interim 1099 Review/Communication with SCOEJanuary 27-March 25 Periodic 1099 Vendor ReviewMarch – December 2015After SCOE has generated the 1099 file, no NEW data can be added to the 1099 form by the districts You will need to contact Erin Graves @ SCOE ................
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