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How to setup and use your Dynamics 365 Business Central system to print your IRS 1099 forms for 2022

The Internal Revenue Service (IRS) requires one or more versions of the 1099 tax form for payments to vendors. Copies of these forms must be sent to vendors annually on or before the last day of January. On your purchase documents, you can specify that the document is 1099 liable, and you can specify the 1099 code for each vendor.

Setup

Before you start using Business Central, you must set up 1099 Form Boxes and Vendors as 1099 liable. The most common 1099 codes are already set up for you, and they're defined on the 1099 Form Box page, where you can also add new 1099 codes. Before you prepare your reporting for the new year, you must first update your Business Central to handle the new requirements.

To update the 1099 Form Boxes

In order to support the form changes by the IRS, Business Central offers the Update Form Boxes action to include new codes and other requirements in the 1099 form. For more information, see Regulatory 1099 Format Changes and Details.

  1. Choose the icon, enter 1099 Form Boxes, and then choose the related link.

  2. Choose the Update Form Boxes action.

Important: Running the action Update Form Boxes makes reporting for the previous year impossible, since some boxes change their meaning. Make sure that you have done all your reporting for the previous year before you update the form boxes to prepare your system for reporting for the new year.

To set up a vendor as 1099 vendor

  1. Choose the icon, enter Vendors, and then choose the related link.

  2. Open the relevant vendor's card.

  3. On the Payments FastTab, in the IRS 1099 Code field, choose the relevant IRS 1099 code.


Here is a screenshot of the vendor card where this is done:




Documents and entries

To process a document for a 1099 vendor

  1. Choose the icon, enter Purchase Invoice, and then choose the related link.

  2. Create a new entry, and then, in the Vendor Name field on the Purchase Invoice header, specify a vendor with the relevant IRS 1099 code.

  3. Optionally, on the Shipping and Payment FastTab, in the IRS 1099 Code field, override the default value with another code, or delete it to have transaction without an IRS 1099 code.

The IRS 1099 Code field is prepopulated with the value from the vendor card.

  1. Enter all information into the required fields for purchase invoice and post the document. Hover over a field to read a short description.

Once the document is posted, you can go to the Vendor Ledger Entries list page and find that the IRS 1099 Code and IRS 1099 Amount fields are automatically populated.

Tip: Instead of a purchase invoice, you can also use a purchase order as the document, but in this case, the IRS 1099 Code field will be on the Invoice Details FastTab.

To correct posted entries

  1. Choose the icon, enter Vendors, and then choose the related link.

  2. Open the relevant vendor's card.

  3. On the Vendor Card page, choose the Ledger Entries action to open the Vendor Ledger Entries page. Here, you can review a list of all transactions for your vendor.

  4. Locate the entry that you want to correct.

  5. If you want to change the IRS code, find the IRS 1099 Code field, and then change the code for the relevant entry.

  6. If you want to change the amount, find the IRS 1099 Amount field, and then update the existing amount.

Reporting

To find the IRS 1099 statistics

  1. Choose the icon, enter Vendors, and then choose the related link.

  2. Open the relevant vendor's card.

  3. On the Vendor Card page, choose the 1099 Statistics action to open the Vendor 1099 Statistics page.

To review IRS 1099 amounts for a specific vendor

  1. Choose the icon, enter Vendors, and then choose the related link.

  2. Open the relevant vendor's card.