QAD 2017 Enterprise Edition > User Guides > Global Tax Management > GTM Reporting > 1099 Reporting
  
1099 Reporting
In the United States, the Internal Revenue Service (IRS) requires organizations to submit an annual 1099 form on certain types of payments to suppliers. The IRS uses the 1099 form declarations to track payments between businesses or between an organization and independent contractors. Based on these declarations, the IRS verifies whether the organization paid the correct amount of taxes.
The 1099 Box MISC report is not required for all suppliers. It is not required for corporations—although exceptions exist for certain types of services—and is only required for payment for services, not for goods. The declaration must differentiate among several categories of payments, such as rent, royalties, medical, and health care. Each category is assigned a specific box on the form.
The IRS accepts printed documents completed by hand or documents submitted electronically. If you are required to file 250 or more returns, you must file in electronic form. However, you can request a waiver. The system supplies functions for generating both printed reports and electronic files:
• Use 1099-Misc Report (US) (29.6.3.13.6) to generate a report for printing.
• Use 1099 Electronic Declaration (29.6.3.13.7) to generate an electronic file.
• Use 1099-MISC Paper Declaration (29.6.3.13.8) to print the 1099-MISC data on preprinted paper forms.
You do not have to report the following:
• If the payer is outside the US, but makes payments to US suppliers
• If the payer is in the US, but makes payments to non-US suppliers who do not have a social security number or US federal tax ID
In some cases, payments to employees must be reported; for example, when an employee dies during the year. In such cases, you must report the accrued wages, vacation pay, and other compensation paid after the date of death (Box 3), director’s fees, and other remuneration (Box 7).
Note: You do not need to report normal wages or business expense reimbursements on the 1099-Misc Report.
If you must submit 1099 reports in the US, a number of setup steps are required:
• Set up the correct information on business relations associated with entities and for suppliers.
• Define purchase type codes to group the expense amounts that are reported.
• Define box attributes for generating the report.