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Misc Reporting Config

This document provides instructions for configuring SAP for 1099 MISC reporting in the United States. It describes how to define withholding tax types and codes, assign them to company codes, and define accounts. It also covers configuring classical withholding tax and populating vendor master fields to flag 1099 vendors. Instructions are provided for retroactively changing withholding tax bases and codes on cleared documents.

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Titus George
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439 views4 pages

Misc Reporting Config

This document provides instructions for configuring SAP for 1099 MISC reporting in the United States. It describes how to define withholding tax types and codes, assign them to company codes, and define accounts. It also covers configuring classical withholding tax and populating vendor master fields to flag 1099 vendors. Instructions are provided for retroactively changing withholding tax bases and codes on cleared documents.

Uploaded by

Titus George
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Select Accounting Financial Accounting Accounts Payable Withholding Tax USA S_PLO_09000314 - 1099 Miscellaneous

1099 MISC reporting Config


Added by Srikanth Tamma, last edited by Srikanth Tamma on May 19, 2008 (view change) Of late, there have been a lot queries on 1099 MISC reporting. SAP Note No. 363650 clearly explains how to configure this. As not everyone seems to be having access to this note, I thought of reproducing it here. At the end, vendor master maintenance for 1099 vendors also is covered, which is not a part of the SAP Note. A) How to configure extended withholding tax to get correct 1099MISC reporting? 1) Define a type:Go to IMG path:-> Financial Accounting Global Settings -> Withholding Tax -> Extended Withholdng Tax -> Calculation -> Withholding Tax Type -> Define Withholding Tax Type for Payment Posting Define one withholding tax type for 1099 federal reporting. If state withholding tax needs to be withheld, a second withholding tax type needs to be created to allow two withholding tax postings for one vendor. 2) Define a code: Go to IMG path: -> Financial Accounting Global Setting -> Withholding Tax -> Extended Withholdng Tax -> Calculation -> Withholding Tax Code -> Define Withholing Tax Code Define one code for each box of the 1099MISC form where a base amount needs to be reported. The codes must have the following numbering to get correct reporting: TYPE CODE FE FE FE FE FE FE FE FE FE FE FE FE FE 01 02 03 05 06 07 08 09 10 DESCRIPTION Rents Royalties Other Income Fishing boat proceeds Medical and health care payments Nonemployee compensation Substitute payment in lieu of dividends Direct Sales to a buyer for resale Crop insurance proceeds W/T PERCENTAGE 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%

3b or 13 Excess golden parachute 3c or 14 Gross proceeds to an attorney 7b 15 Section 409A income Section 409A deferrals

Base amount, percentage to tax : 100 % Postings, Post.indic. 1 Calculation, With/tax rate: leave blank If tax must be withheld, a new code must be created starting with an F. Example F1 for rents. In this case fill the followig field as follows: Calculation, With/tax rate: 30% The codes for tax rate 30% should look as follows:

TYPE CODE DESCRIPTION FE FE FE FE FE FE FE FE FE FE FE FE FE F1 F2 F3 F5 F6 F7 F8 F9 F0 Fb Fc Fd Fe Rents Royalties Other Income Fishing boat proceeds Medical and health care payments Nonemployee compensation Substitute payment in lieu of dividends Direct Sales to a buyer for resale Crop insurance proceeds Excess golden parachute Gross proceeds to an attorney Section 409A deferrals Section 409A inocme

W/T PERCENTAGE 30% 30% 30% 30% 30% 30% 30% 30% 30% 30% 30% 30% 30%

If state tax must be withheld, assign a second type to the company code as follows: TYPE CODE DESCRIPTION ST 16 State tax withheld W/T PERCENTAGE depending on state

3) Assign Withholding Tax Types to Company Code: Go to IMG path: -> Financial Accounting -> Financial Accounting Global Settings -> Withholding Tax -> Extended Withholding Tax -> Company Code -> Assign Witholding Tax Types to Company Code Switch on: Vendor data, With/tax agent and fill the validity period. 4) Assign an Account: Go to IMG path: -> Financial Accounting -> Financial Accounting Global Settings -> Withholding Tax -> Extended Wtihholding Tax -> Postings -> Account for Withholding Tax -> Define Accounts for Withholding Tax to be paid over B) How to configure classical withholding tax for 1099MISC reporting 1) Define a code Go to IMG path: -> Financial Accounting Global Settings -> Withholding Tax -> Withholding Tax -> Calculation -> Maintain Tax Codes Define one code for each box of the 1099MISC form where a base amount needs to be reported. The codes must have the following numbering to get correct reporting (2001 reporting): CODE 01 02 03 05 06 07 08 09 DESCRIPTION Rents Royalties Other Income Fishing Boat Proceeds Medical and health care payments Nonemployee compensation Substitute payments in lieu of dividends or interest Direct Sales to a buyer for resale

10

Crop Insurance proceeds

13 or 3B Excess Golden parachute 14 or 3c Gross proceeds paid to an attorney 7B 15 Section 409A income Section 409A deferrals

Percentage subject to tax : 100 % Mark box :Posting with the payment. If tax must be withheld, a new code must be created starting with an F, Example F1 for Rents. In this case fill the fields as follows: CODE DESCRIPTION F1 F2 F3 F5 F6 F7 F8 F9 F0 FB FC FD FE Rents Royalties Other Income Fishing boat proceeds Medical and health care payments Nonemployee compensation Substitute payment in lieu of dividends Direct Sales to a buyer for resale Crop Insurance Proceeds Excess golden parachute Gross proceeds to an attorney Section 409A deferrals Section 409A income

Percentage subject to tax: 100% Withholding tax rate: 30% (or valid rate for reporting year) Mark box: Posting with payment To flag a vendor in SAP as a 1099 vendor, two fields need to be populated. 1. On the Control screen of the vendor master, populate either "Tax Code 1" field with vendor's Social Security Number or ITIN if it is an individual or "Tax Code 2" field with his corporate tax ID for corporate vendors. The format for SSN/ITIN is xxx-xx-xxxx and corporate tax ID is xx-xxxxxxx. 2. On the Accounting Info. screen, populate the "W.tax code" field under the "Withholding Tax" box. Any posts done before this changes were implemented will not show on 1099. You will need to run program RFWT0020 to flag 1099 items retroactively. If the withholding tax base amount and/or the withholding tax code needs to be changed after an invoice has been cleared please follow the procedure below: 1) Change Document Change Rules Go to IMG -> Financial Accounting Global Settings -> Document -> Line Item -> Document Change Rules Go to account Type K field name BSEG-QSSHB and click off Line item not cleared. Go to account Type K field name BSEG-QSSKZ and click off Line item not cleared. 2) Change Document Change Rules for extended withholding tax Go to IMG -> Financial Accounting Global Settings -> Line Item -> Document Change Rules Go to account Type K field name

Go to field WITH_ITEM-WT_QSSHB and click on 'Field can be changed' Go to field WITH_ITEM-WT_WITHCD and click on 'Field can be changed' 3) Change Witholding Tax Code Go to IMG -> Financial Accounting Global Settings -> Withholding Tax -> Withholding Tax -> Calculation -> Check witholding tax codes Go to the respective withholding tax code and click off Posting with payment. 4) Change the payment document of the invoice which needs to be changed. 5) Your changed documents will be selected with report RFW1099M

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