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Managing Multiple 1099 Codes for the Same Vendor in the US Version of Microsoft Dynamics NAV


Symptoms

A company works with Vendors that require the use of multiple 1099 Codes for a specific Vendor. How does Microsoft Dynamics NAV manage a Vendor where multiple 1099 Codes are required? For example, a Vendor may be subject to reporting of Royalties and Miscellaneous Income, which requires two distinct 1099 Codes for the Vendor.

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Cause

The Default 1099 Code on the Vendor Record populates on the Purchase Order Header or Invoice Header when a purchase document is created for the Vendor. There is a limit of one 1099 Code Per Purchase Invoice Header. Therefore, in order to manage 1099 postings for a Vendor where more than one 1099 Code is used, a separate Purchase Invoice would need to be generated using each different 1099 Code.

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Resolution

In order to manage 1099 postings for a Vendor where more than one 1099 Code is used, a separate Purchase Invoice would need to be generated using each different 1099 Code.

For example, the 1099-MISC Box 7 Non-employee compensation(MISC-07) could be used as the default 1099 Code on the Vendor Card because the vendor primarily provided consultant services. However, the Vendor may occasionally complete activity that qualifies for Royalty Income that is reported in 1099 MISC Box 2 (MISC-02). Therefore, when the user creates the Purchase Order/Invoice, they will need to change 1099 Code that defaults into the Purchase Order Header - Invoicing Tab/Fast Tab from the Vendor Card. Now, you could have a single Purchase Order, Receive and Invoice the line with MISC-07, change the Code to MISC-02 on the Invoicing Tab, and then Receive and Invoice the remaining line(s) with the MISC-02 code to establish the second portion of the Invoice related to the other 1099 Code. The system will also control what lines on the Document are reportable for 1099 by selecting the 1099 Liable Boolean field, which is only controlling the total value that gets summed and reported as the amount in the specific box identified on the Header of the Purchase Document.

The key end result is that the Vendor Ledger Entries will be recorded with each respective 1099 Code and 1099 Amount that will generate the correct reporting on the year-end 1099 Reports. Each Vendor Ledger Entry also has a single 1099 Code, which is why you are limited to a single 1099 Code per Purchase Order Invoice posting.

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Keywords: vkball, kb

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Article Info
Article ID : 2258973
Revision : 2
Created on : 1/27/2017
Published on : 1/27/2017
Exists online : False
Views : 108