1099 Processing Frequently Asked Questions

1. What 1099 Reports Does Oracle Payables Support?

A: Oracle Payables only supports the 1099-MISC form.
Oracle supports the following boxes on the 1099 MISC form:
MISC1 (Rent)
MISC2 (Royalties)
MISC3 (Prizes and awards)
MISC4 (Federal income tax withheld)
MISC5 (Fishing boat proceeds)
MISC6 (Medical and health care payments)
MISC7 (Non-employee compensation)
MISC8 (Substitute payments in lieu of dividends or interest)
MISC10 (Crop Insurance Proceeds)
MISC13 (Gross Proceeds Paid to an attorney)
MISC14 (Excess Golden Parachute Payments)
MISC15A (Section 409A Deferrals)
MISC15B (Section 409A Income)

Please note that Oracle Payables does not support 1099-INT. You will need to use an outside package to generate 1099 forms other than 1099-MISC.

2. What Electronic Media Does Oracle Support For 1099 filing?

A: Oracle supports the following electronic media types for 1099:

Magnetic Tape - Payables formats your 1099 data so that you can record it on magnetic tape
Electronic Filing - Payables formats your 1099 data so that you can transmit an electronic file to the IRS.

3. What are the deadlines for 1099s?

Due Date for forms (Paper copy)

• To Recipient (i.e. the Supplier): 01/31/2012
• If Box 8 or 14 filled in, there is an extention 02/15/2012
• To IRS (and only if filing less than 250 forms): 02/28/2012

Due Date for forms (Electronic Filing)

• To IRS: 04/02/2012

You can file form 8809 to request a 30 day extension.

4. What Is The Query Driver and How Do I Set It Up?

A: The Query Driver allows you to determine how to drive the comparison between the balancing segment values on the Tax Reporting Entity and the balancing segment values on the Payables transactions.

The tax reporting entity is essentially a list of balancing segment values. All 1099 reports use the tax reporting entity as part of the selection criteria when searching for 1099 Payables transactions.

When the Tax Reporting Entity is setup, you have to specify the balancing segment of the accounting flexfield that the 1099’s will use. If an invoice has an account with this balancing segment, then it’s 1099 reportable.

The Query Driver lets the system know which account number to look at, the account on the invoice, or the account on the payment.

All 1099 reports have to be set to the same thing (INV or PAY) or the results won’t be the same.

• If set to INV, then the reports will look at the Invoice Distribution Charge Account.

• If set to PAY, then the reports will look at the Bank’s Cash Account.

See Note:167828.1 for specific setup instructions.

5. The 1099 form only allows 30 characters of the address, and this is no™t enough.

This has been requested over and over and there is not enough room on the form to handle more than 30 characters. Oracle does not have control over the size of the form, this is an IRS design. You will have to use abbreviations in your supplier site address to shorten it to 30 characters.  You can make a special site just for this case, and make it the Tax Reporting Site.

Our software takes the 1st supplier site address line and truncates the trailing spaces, adds one space, and concatenates the 2nd address line, etc., until there are 30 characters, and then truncates the rest of the address lines.

Another solution is to print Vendor Mailing Labels, and they can peel off the appropriate label and stick it on the envelope.

NOTE: All sites are reported on 1099s. The Tax Reporting Site is the site that has its address used for printing on the 1099 form. That is how Oracle knows where to send the 1099 form.

The 1099 Electronic Media will truncate the address after 40 characters.

6. I have turned on Combined Filing for a Supplier Site, but I a™m not getting any K records.

A: The Combined Filing flag on the Supplier record used to control whether you get an LOV for the State Code on the Site Address in 11i.  In R12, it does not control anything.

In 11i: If the flag is NOT checked, the State field is white, not required, and does no€™t have a LOV.
If the flag IS checked, the State field is yellow, required, and has an LOV listing all the valid US state codes.

To turn on Combined Filing, Navigate to Setup > Options > Payables
Select the Supplier tab
Check Combined Filing Program in the Tax Reporting region.
This turns on Combined Filing for the Org which is attached to Operating Unit at the top of the screen.

Then go to Setup > Tax > Regions.

Either check the option Use Pay Sites Tax Region or enter the tax region you want to use for all invoices in the Income Tax Region field.

• If you choose to use site tax region, the tax region of the suppliers sites will be used as the default tax region for the suppliers distribution lines.
• If you enter the tax region instead, it will be used as the default tax region for all payments, regardless of the supplier sites tax region. You can override the default tax region for each invoice distribution line in the Enter Invoices form.

Any invoice which is cut to a supplier who has that state abbreviation in their supplier site's address, will have the state code copied into the Invoice Distribution field called Income Tax Region.

When running 1099's, if the Invoice Distribution has a Income Tax Type (MISCx) and an Income Tax Region (State code), and the state is one that is setup for combined filing and the amount is greater than the amount set up for combined filing (because it could be different from Federal $600) then you'll get a K record for combined filing in your 1099s.

7. When Are 'B' Records and 'K' records Created If Combined Filing is Enabled?

A: When Combined Filing is enabled a 'B' record will be created for each individual supplier for each participating tax region that a supplier that has met the reporting limit for that tax region. All of the 'B' records for each tax region are summarized in a 'K' record for the corresponding tax region. The 'K' record is a summary of all of the qualifying 1099 payments, 'B' records, for all suppliers for a given tax region. If a supplier has payments without a tax region, in a non-participating state or the total payments for the tax region do not meet the state reporting limit, but they do meet the federal reporting requirements, a 'B' record without the state code will be created for that supplier. A 'K' record will not be created in this case.

Examples:
1. A supplier has invoices paid in 3 different income tax regions (states) that are participating (a tax region code is assigned in the Tax Region form). The total in each state does not qualify for state reporting, but the overall total paid to the supplier is over $600.

Result: Three 'B' records will be created for the supplier, one for each tax region, with no state code in positions 747-748. No 'K' records will be created.

2. A supplier has invoices paid in 3 income tax regions (states) that are not participating (No tax region code assigned in the Tax Region form). The overall total paid to the supplier is over $600.

Result: One 'B' record will be created for the supplier with no state code in positions 747-748. No 'K' records will be created.

3. A supplier has 3 invoices paid with the Income tax region null. The overall total paid to the supplier is over $600.

Result: One 'B' record will be created for the supplier with no state code in positions 747-748. No 'K' records will be created.

4. A supplier has invoices paid in 3 income tax regions (states) that are participating. The total to each state does qualify for state reporting, and the overall total paid the supplier is over $600.

Result: Three 'B' records will be created for the supplier, one for each tax region, with the corresponding state code in positions 747-748. Three 'K' records will also be created with the corresponding state code in positions 747-748.

5. A supplier has invoices paid in 3 income tax regions (states) that are participating. The total for two states does qualify for state reporting, the total for the third does not, and the overall total paid the supplier is over $600.

Result: Three 'B' records will be created for the supplier. Two with the corresponding state code in positions 747-748 for the tax regions that had qualifying amounts. One without the state code in positions 747-748 for the tax region that did not meet the reporting limit. Two 'K' records with the corresponding state code in positions 747-748 will be created for the tax regions with qualifying amounts.

6. My state filing requirement is lower than the Federal filing requirements. Will suppliers exceeding the state limit but not the Federal limit be included on the 1099 tape?

Example:
Federal Reporting Limit = $600
Florida Reporting Limit = $100 (not the actual limit) You pay one invoice for a 1099 supplier based in Florida for $110.
Will this payment appear on the 1099 tape?

Result: This payment will appear on the 1099 tape. If you enable the Combined Filing Payables option, when you submit the 1099 Tape, Payables produces K records for all tax regions (or states) participating in the Combined Filing Program that have qualifying payments which equal or exceed the tax region's reporting limit in qualifying states. Payables also produces B records for suppliers with 1099 payment amounts which equal or exceed the tax region's reporting limit in qualifying states.

8. Why Are My 'B' Records Not On Separate Lines?

A: The "B" records are 750 bytes long, but are grouped together such that there are 748 bytes, two spaces, another 748 bytes then the carriage return and linefeed characters. So the total record size is 1500 bytes, which includes two 750 byte records.

The exception is that if it is the last "B" record, and it is an odd number (i.e there is not another record that will make up 1500 bytes), the record will be truncated after the zip code field (position 498), if there are only spaces that make up positions 499-750. The IRS accepts the 1500 byte records.

9. Supplier Exception Report gives different results for Summary and Detail versions.

This is a known issue. Summary version is correct and matches the 1099 Forms. The detail version is incorrect.

10. Will An Invoice That Was Paid and Voided Show On The 1099?

Scenerio  Paid   Voided    Reissued Show 2009 Show 2010
1             2009   2009                            No            No
2             2009   2009          2009          Yes           No
3             2009   2009          2010          No           Yes
4             2009   2010                            Yes           No
5             2009   2010          2010          Yes          Yes

11. When is the Table AP_1099_TAPE_DATA_ALL Updated?

A: The table is updated when you submit the 1099 Electronic Media process. The data in this table is refreshed every time you run this process.

12. Can the 1099 processes combine data for one supplier for one legal entity in a multi-org environment?

No. Multiorg prevents data from different orgs from being combined.
Workaround: Produce individual 1099s and do NOT specify to print only reportable vendors (i.e., those that don't meet the $600 minimum requirement). Then manually add them all up and hand-type a 1099.

13. How Do I Find The 1099 XML Template for 1099 Forms PDF?

A: Here are the steps you need to take to download the pdf file:
Login to the application
Choose responsibility - XML Publisher Administrator
Navigate to Templates

XML Publisher Templates Search Criteria is displayed
Click the "Application" flashlight to search for applications
Search by Application Name - enter "Payables"
Click Go

The 1099 Forms template is returned

Name = 1099 Forms
Application = Payables
Data Definition = 1099 Forms PDF Format
Type = PDF
Start Date = < enter your date >

If you click on the link 1099 Forms you see the properties:
Default File: APXT7F99P_en_US.pdf
Code: APXT7F99P

There is a further link to download this pdf file.

14. How does MISC4 work?

MISC4 is always a NEGATIVE amount on an invoice. On the 1099 forms it will be shown as a POSITIVE amount.

If you enable the Include Income Tax Type on Withholding Distributions option then you can report on federal income tax withheld (MISC4) for 1099 suppliers.

When this option is enabled, then when Payables automatically creates distributions of type Withholding Tax for 1099 reportable suppliers, Payables automatically provides the following values:

Income Tax Type value of MISC4.
Income Tax Region value (i.e. the state code abbreviation), if the Combined Filing Payables option is enabled.

Note: Payables provides these values only for distributions it creates automatically. If you create a Withholding Tax distribution manually, then you need to enter these values manually.

When you enable this option, Payables initiates the Update 1099 Withholding Tax Distributions program, which updates these values on existing Withholding Tax distributions. The program selects distributions to update as follows:

• If the current date is before March 1 of the current calendar year then the program updates distributions with a payment date of January 1 of the previous calendar year or later.
• If the current date is March 1 of the current calendar year or later, then the program updates distributions that have a payment date of January 1 of the current year or later.

If there is ANY MISC4 amount on an invoice, then all other MISC amounts on that same invoice will be reported, even if it’s less than $600. However, other invoices without any MISC4 will not be reported for that supplier.

15. How Can I Generate a 1099 For a Supplier When No Payment Has Been Made To That Supplier?

A: Oracle Payables will not create a 1099 for a supplier, unless an invoice is created and paid within the date range selected. Other factors, such as income tax type, etc, are also considered. If your supplier was not paid, then a 1099 will not be generated by Oracle Payables. You will need to create a manual 1099 for this supplier.

16. How do I pay 1099s from another system (legacy system)?

Review How To Adjust or Correct 1099 Payments When Dealing With Legacy Data/Corrections Note:96950.1 as this gives information on how to correctly handle debit and credit memos.
For example, you cannot enter a negative and positive distribution on the same invoice. You have to have a separate debit or credit memo for this to work.

17. My 1099 forms or electronic media wraps strangely.

Make sure the correct SRW driver is being used.
Make sure Concurent => Program => Define says STYLE = REQUIRED

18. I am trying to Merge 2 Suppliers, and the system prevents this. What could be happening?

There can only be one Supplier Site marked at the 1099 Reporting Site. If both Supplier each have a 1099 Reporting Site marked, then you would have 2 1099 Reporting Sites after the Merge. This cannot happen.

Before you can successfully merge the 2 Suppliers, you have to unmark one of the Supplier Sites as the 1099 Reporting Site.

19. What are the MetaLink Keywords I Should Use When Searching for 1099 Information on MetaLink?

A: Update Income Tax Details Utility and Report - Use APXT7UTT or APXTRUTT
Tax Information Verification Letter - Use APXVDTIN
1096 Form - Use APXT7F96 or APXTRF96
1099 Form - Use APXT7F99 or APXTRF99
1099 Invoice Exceptions Report - Use APXT7INE or APXTRINE
1099 Payments Report - Use APXT7RVT or APXTRRVT
1099 Electronic Media - Use APXT7CMT or APTCMT
1099 Supplier Exceptions Report - Use APXT7VEE or APXTRVEE