How to change the 1099 amount for a vendor who was not marked as a 1099 vendor in the year that the transactions were posted in Payables Management in Microsoft Dynamics GP

Note Before you follow the instructions in this article, make sure that you have a complete backup copy of the database that you can restore if a problem occurs.

Follow the method for the appropriate version you are using:

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Microsoft Dynamics GP 2013 and higher versions:

New functionality was added to Microsoft Dynamics GP 2013 and higher versions that will make changing the 1099 status for a vendor very easy. You can use the steps below to change the 1099 settings on the vendor as well as their transaction history at the click of a button, whether you are making the vendor a 1099 vendor or reversing them from being a 1099 vendor.  Follow these steps for either scenario: 

1. Under Microsoft Dynamics GP, click on Tools, point to Utilities, point to Purchasing, and click Update 1099 Information.

2. In the Update 1099 Information window, select the last radio button for 'Vendor and 1099 Transactions'. (Only this selection will work.)

3. In the FROM and TO sections, select the appropriate Method:
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Method 1 - To change a vendor from currently being a 1099 vendor toNOTBE a 1099 vendor, set up the sections as follows:

FROM
Tax Type = Miscellaneous (or appropriate 1099 type the vendor had) 
1099 Box  Number = 7 (or appropriate 1099 box number the vendor had)

TO
Tax Type = Not a 1099 Vendor*
1099 Box Number is grayed out
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Method 2 - To change a vendor from currently not being a 1099 vendor to BE a 1099 vendor, set up the sections as follows:

FROM
Tax Type = Not a 1099 Vendor*
1099 Box  Number is grayed out

TO
Tax Type = Miscellaneous (or appropriate 1099 type as needed) 
1099 Box Number=7 (or appropriate 1099 box number as needed)
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Note: if 'Not a 1099 Vendor' is not an option in the pick list, then you need to revisit step 2.


4. In the RANGES section, restrict to the Vendor ID and INSERT it into the range restriction section.

5. Click PROCESS at the top. (This process updates the 1099 tables as well as the Payables Transaction tables and the Vendor card.) 

6. Print the Update 1099 Information Audit Report to the screen and/or printer and verify the 'new' and 'old' values used were correct. 

7. Verify Vendor setup:  Navigate to Cards, point to Purchasing, and click on Vendor. Select the Vendor ID and click on OPTIONS button. Verify the new values for the Tax Type and 1099 Box now reflect the new values used and will be used going forward. (This process changed the 1099 setup on the vendor card for you.) 

8. Verify transactions: If you did Method 2 above, now navigate to Transactions, point to Purchasing and click on Edit 1099 Transaction Information. Enter the Vendor ID and tab off (or click Redisplay), the vendor's transaction history should populate the bottom section of the window. Review each transaction. You can edit the Tax Type, Box number and 1099 Amount for each individual transaction as needed. If you made any changes, click Process at the top when you are finished so your changes update the 1099 tables used to print the 1099 form. 

NOTE: If you set the vendor to 'Not a 1099 Vendor' using Method 1, you will get the message "XXXXXX is not a 1099 Vendor." in this window. If the Vendor card is set up to not be a 1099 vendor, you would be unable to select the vendor in this window as they have no 1099 information to view.


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Microsoft Dynamics GP 2010 and prior versions:

1. Have all users exit Microsoft Dynamics GP. (Only necessary to make sure nothing is being posted to the vendor you are working with.)
2. On the Cards menu, point to Purchasing, and click on Vendor. Select the vendor ID you want to change. Click on the OPTIONS button at the bottom, and select the appropriate Tax Type and 1099Box number as needed. Click OK and Save the changes.
3. Next, on the Cards menu, point to Purchasing, and then click Summary.
   
4. In the Vendor ID list, click the appropriate vendor ID, and then click Period.
   
5. In the Vendor Period Summary window, click the right arrow button next to the 1099 Amount field.
   
   
   
6. In the 1099 Details window, click Month or Year in the Display area.
   
7. In the Year field, type the appropriate year. If you clicked Month in step 5, click the appropriate month in the Month list.
8. Type the 1099 amount in the Amount field for the appropriate 1099 Box, and then click Save.
   
9. Repeat steps 6 and 7 to change the 1099 amounts for other periods or years.
10. Click Save, and then close the 1099 Details window.
    
11. In the Vendor Credit Summary window, click Save.
    

Note: A tool is available that you can use to automatically update a vendor so that the vendor has the correct 1099 amounts. This tool is called the 1099 Modifier and is available as part of the Professional Services Tools Library (PSTL) package. This is a free tool, but can only be downloaded by a Partner on PartnerSource. You must do step 2 above first to set the vendor up as a 1099 vendor, and then can use the 1099 Modifier tool to modify records that have already been paid and should be 1099 records.  It does not update records in work or open status. This tool only works well if you update the vendor and then use this tool immediately to modify paid records. We have seen issues if you have already made the vendor be a 1099 vendor and have since processed records that are 1099 records now, so historical paid records are a mixture of some marked as 1099 records and some not.... So just be sure to verify the results if you use this tool.  

For more information about the Professional Services Tools Library (PSTL), use one of the following options:

Customers:
For more information about PSTL, contact your partner of record. If you do not have a partner of record, visit the following web site to identify a partner: Microsoft Pinpoint

Partners:
For more information about PSTL, visit the following web site:

https://mbs.microsoft.com/partnersource/northamerica/deployment/downloads/service-packs/NOAM_PSTL