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Resolution:
Costpoint uses the following process to calculate 1099 income:
- Vendor Check History table- Identifies all pay vendors in the range which have had payments in the current year. Eliminates non-1099 vendors. Identifies which checks were paid to these pay vendors in current & prior years. Then totals the amounts of these checks by voucher.
- Voucher Line Account History- the program totals the 1099 amount of each voucher by 1099 Type.
- Cash Organizations- Once the voucher line 1099 amounts have been totaled, the process identifies the cash organizations from which the 1099 vendors were paid and uses these cash organizations to map the pay vendors back to the proper company.
- Calculate 1099 Amount: The examples below illustrate 1099 amount calculation
Example A Voucher: 1099 Amount $100.00, Non-Taxable Amount 80.00, Total $180.00
Total Prior Year Payments $70.00, Total Current Year Payments 110.00, Total $180.00
1099 amount = Total Current Year Payments or (1099 Income - Total Prior Year Payments) Total Current Year Payments = $110.00 ;(1099 Income - Total Prior Year Payments) = ($100-$70) = $30 Since $30 is less than $110, Costpoint uses $30 as 1099 income. After prior year payments, only $30 of 1099 income remained to be paid off in the current year. The other portion of current year payments was made on non-1099 amounts.
Example B Voucher: 1099 Amount $100.00 Non-1099 Amount 80.00 Total $180.00
Total Prior Year Payments $ 20.00 Total Current Year Payments 60.00 Total $ 80.00
1099 Amount = Total Current Year Payments or (1099 Amount - Total Prior Year Payments) Total Current Year Payments = $60 (1099 Amount - Total Prior Year Payments) = ($100 - $20) = $80 Since $60 is less than $80, Costpoint uses $60 as the 1099 Amount. While the voucher included $80 of 1099 income after prior year payments, the vendor only received $60 of that in the current year. The vendor can only be taxed on 1099 income actually received.
Knowledge Base Reference Number: KBA #18920
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