This article details the setup and any changes for 2023 for 1099-MISC, 1099-NEC, and 1096 forms.
Setting up Miscellaneous Codes
Select Type 1099Codes.
Verify that these codes are entered.
Select 1099MiscPrintFormat.
Verify Code 1099-NEC 3 UP with a value of FNAP_1099Nec3Up2021Report is entered. This format was new for Tax Year 2021 and was modified for Tax Year 2022.
Select ReturnAmountCode_A.
Verify the Return Amount Codes used by your Agency. As of Tax Year 2020, there is no longer Non-Employee Compensation, Code = 7.
Select ReturnAmountCode_NE.
Verify that these codes are entered:
- 1 = Nonemployee compensation
- 4 = Federal income tax withheld
Setting Up the Vendor Master
Select the appropriate Type of 1099 and select Amount Code. Be sure the Print 1099 box is checked. Tax ID and Type of TIN will also need to be completed.
Owner Name can be used if the 1099 recipient name differs from the name in the Name field. (For example, AP checks are payable to Business Name from invoicing {in the Name field} but the 1099 form goes to the taxpayer {Owner Name} that needs to file/pay income taxes, perhaps an individual or LLC).
This report will show all vendors with a 1099 code. For those listed with Type of 1099 = A, look at each vendor master. If the Amount Code = 7, then change the Type of 1099 to NE and the Amount Code to 1. Be sure the Print 1099 box is checked.
If a Vendor is changed from 1099 Type A, Amount Code 7, the vendor’s payments will also need to be changed for the tax year.
Once on Vendor Master, click on the Payments button. Sort the payments from Newest to Oldest by right-clicking in the Check Date field of the first payment and selecting Sort Newest to Oldest.
Change the Type of 1099 Code to NE and the Amount Code to 1 on all transactions with a Check Date in the tax year. Change all payments for the tax year and any payments from the new tax year that may have been cut since January 1.
Printing the 1099 and 1096
Recommended Forms: Greatland 1099Misc Preprinted 2 per page and 1099 NEC Preprinted 3 per page. They have multiple different kits available, please choose the one that best fits your agency’s needs.
1099-NEC
Check the box for All Vendors. Select NE in the Type of 1099 field and enter the tax year in the Payment Year field. Then click Create Payee’s and select Yes to continue. This will create Transmission #1.
To run a detailed report of the 1099-NEs created, use the same setup as above (Check All Vendors, Type of 1099 = NE, Payment Year = Tax Year, Transmission # = 1). Click on Reports and select the Transmitter TIN. Choose Detail Report to get a report of all 1099 recipients for this transmission. Verify all information is correct.
To print the 1099-NEs, use the same setup as above (Check All Vendors, Type of 1099 = NE, Payment Year = Tax Year, Transmission # = 1). Click Reports, select the Transmitter TIN, and select 1099-NEC 3 UP as the 1099 Print Format. Print directly to the forms.
1099-MISC
Follow the steps for 1099-NEC with a few changes.
Select All Vendors, Type of 1099 = A; Payment Year = Tax Year, then Click on Create Payee’s. This will create Transmission #2.
There may be no 1099-Misc found. That’s okay as long as there are no vendors for that type of form.
To Print the 1099-A’s created, Check All Vendors, Type of 1099 = A, Payment Year = Tax Year.
Transmission # = 2. Click Reports, select the Transmitter TIN, and select 1099-MISC.
1096
Once the 1099 forms have been completed, print two 1096 forms, one for Form NE and one for Form A (if needed), again making your selections at the top of the screen as was done for 1099 forms.
Creating an Electronic Filing
Click on Transmitter Setup. Make sure all information in these fields is in ALL CAPS. Vendor information must also be completed.
Two files will need to be created, one for Form A and one for Form NE, again making your selections at the top of the screen as was done for printing 1099 forms.
Then click Electronic Filing.
Click Yes.
Enter your agency’s Transmitter TIN, the Path to File, and the name of the document may auto-populate. The document is a text file, so be sure .txt follows the name. Be sure to name the documents in such a way you can tell the difference between NE and A files.
Choose the appropriate box if the file is a test file or for a prior tax year.
Click Create File.
Follow the same steps for 1099-MISC.
The two separate files are now ready for uploading.