By Nikhil Lodha
What is the 1099 Form?
The 1099 form is a series of documents used for filing income tax returns to IRS in the United States of America. There are a number of different 1099 forms that report the various types of income you may receive throughout the year apart from salary. Oracle supports the generation of only 1099 MISC form.
Individuals or companies who are working on contractual basis need to file their income tax return referring 1099 form. We define such individuals or companies as Suppliers in the system.
Supplier address in the system may be different from the legally registered address. In such case, suppliers provide legally registered address details in W9 form. As per the income tax rule, we must use the same information provided in W9 form for income tax reporting (1099 form).
What is W-9 Form?
Businesses use IRS Form W-9 for getting Taxpayer Identification Number and Certification from contractors. Name, address, and Social Security Number or tax identification number of contractors are provided on Form W9 and these are used for generating 1099 forms.
Oracle has provided fields (as shown in below screenshot) for storing income tax reporting related information of supplier:
Apart from taxpayer address, details required for 1099 form can be maintained here such as Tax Reporting Name & Taxpayer ID.
We can specify which supplier address to be used for 1099 form generation by checking Income Tax Reporting Site at the supplier site level.
However, Oracle does not provide specific fields for storing taxpayer address. This is the limitation of the system and below is a workaround to generate 1099 form with a different address:
How to generate 1099 form with the address provided in W9 form?
Suppliers’ actual addresses are used for procurement and invoicing purpose. It is not advisable to change actual addresses for income tax reporting purpose as this may affect routine correspondence business activities.
Therefore, in order to meet this requirement to print a different address on 1099 form, we have to follow below steps:
Prerequisite: Income Tax reporting related configuration should be available in the system for reporting Legal Entities.
The supplier has following actual addresses existing in the system:
These addresses are used for procurement and invoicing purpose.
Following W9 form received from Supplier:
This form has a different address than the actual addresses defined in the system and this address needs to be printed on 1099 form.
- Create an additional address for 1099 reporting mentioned in W9 form. This Address Name should start with “0” (zero) in order to keep it at the top of the list when sorted alphabetically.
- Define sites for required BU(s) from which 1099 form needs to issue.
- Set these sites as Income tax reporting site by checking the checkbox shown in below image. Also, inactivate (end date) these sites, as these are going to be used only for income tax reporting purpose.
Income tax reporting site” must be checked for these sites only.
- Create Site Assignments for these sites:
- Sites are still accessible by selecting Inactive Status:
- Supplier configuration is completed.
Now, to generate 1099 form,
- Create and pay accounts payable invoices having income tax details.
- Account and post these invoices and payments to General Ledger.
- Generate 1099 form for this Supplier by running process “US 1099 Report”, it will generate 1099 form with “0 W9 ADDRESS”i.e., SAN RAMON CA 94583, which is configured at Supplier in earlier steps:
About the Author
Nikhil Lodha is working with Trinamix as Sr. Functional Consultant with 8.5 years of experience in Oracle Apps Techno-Functional area. He has good command on technical areas like PL/SQL, shell scripting, Oracle D2K & discoverer tools. He was recognized for providing many out-of-the-box solutions for many business processes and technical components. Presently working as, a Sr. Finance Functional Consultant and expert in handling Oracle Financial modules as AP, AR, GL, CM, FA & Taxes.