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Flag Transactions

1099 Flag

On PEUPPE, Vendor tab, use the "1099 Flag" field to whether or not a 1099 should be issued for a vendor. This field may be used in conjunction with Relate To codes in the "1099 Dflt" field. Alternatively, specific invoices during Accounts Payable data entry time can be flagged using the Relate To fields, or the Bank Reconciliation page Relate To field can be updated according to the 1099-MISC type. 

IRS 2TIN-NOT (Notification) and Backup Withholding

If the IRS has sent notification twice in three calendar years that a given vendor (PEID) is reporting under an incorrect Tax Payer ID Number (TIN) or Social Security Number (SSN), tag this vendor by placing a checkmark in the “2nd TIN Notice” box within the vendor’s record in the PE Information (PEUPPE) page, Vendor tab, 1099 section which will place an “X” in the "2nd TIN Not" box on the 1099-MISC form.

You may document the receipt of the IRS' "2nd Tin Not[ices]" by recording this event within PEUPPE Associations tab.  Define common code PEAS/2TIN-NOT to add "2TIN-NOT" to the drop-down list within the Code column of the Association's tab. 

When “Backup Withholding” (BWH) is needed, the system references common code CK99/2TIN-NOT for configuring the percentage to withhold and other pertinent information about withholding, such as who to send the withholding to, the preferred posting code and object code. 

Note that the checkbox titled “2nd TIN Notice” does not trigger the withholding calculation; it only checks the “2 Tin Not” box on the 1099.

On PEUPPE, when TIN/SSN fields are blank, and the 1099 Flag on the Vendor tab is set to Y, withholding will be performed automatically by the system during the processing of disbursements within the APOH system, using APOHBTUB or APOHININ (update the User Total after the set proof).  The funds withheld will also be reported in the Federal Withholding Box 4 of the 1099-Misc Form for qualifying vendors who meet the threshold for reporting miscellaneous income.

Withholding may also be documented manually by coding a transaction with a “Relate To” code "FW" for Federal Withholding.  This will tell BusinessPlus to place the transaction's value into the Vendor’s 1099-Misc form, Box 4. Additional types of withholding may be defined with a secondary common code CK99/WITHHOLD

Relate To Codes

There are two layers of Relate To codes:

  1. The first tier outlines the various boxes of the 1099-MISC form (common codes CK99/RELATE01, CK99/RELATE02, CK99/RELATE03). The various boxes are defined and assigned a specific Relate To code; this is how BusinessPlus controls where vendor income is reported within the 1099 form.
  2. The second tier defines the codes that will feed data into those boxes (RT01/XX or RT02/XX). Each code represents a box, but "Relate To" codes are not limited to 1099 data and can be used to create any relationship for reporting, routing, withholding, and more.

Flag Invoices on a Transaction Level

To flag transactions on an invoice, Relate To codes are used to determine which information is to be extracted from the Open Hold database. A Relate To code is entered in the Relate To field of all 1099-MISC-related transactions. This field is validated at data-entry time; therefore, any code placed in this field must be a previously defined common code.

Valid Relate To codes need to be defined using common codes RT01 and RT02, with a code value for each of the 1099-MISC values (CC, EX, RE, etc.). In addition, the RT codes are directed into the various boxes on the 1099 form via a secondary common codes CK99/RELATE01, CK99/RELATE02, CK99/RELATE03. Using Relate To codes as a method of flagging 1099-MISC related transactions is most successful if maintained on a regular basis throughout the year.

There are three options to selecting AP transactions in 1099 processing: "BO" for both OH & BK, "BK" for BK only, and "OH" for OH only. If the 1099 process is run selecting OH only, then both Relate To (RT01 & RT02) fields are available to flag 1099 transactions.  If selecting by BK (database) only, then only use RT01 to flag transactions at the Check Level.

Flag Invoices on a Check Level

To flag invoices only on a check level, Relate To codes are used to determine which information is to be extracted from the check management database. A Relate To code is placed in the Relate To field of all 1099-MISC-related transactions. This field is validated at data-entry time; therefore, any code placed in this field to be used in later extractions must be defined. The valid Relate To codes need to be defined using the common code RT01 and RT02 with a code value for each of the 1099-MISC values (CC, EX, RE, etc.).

There are three options to selecting AP transactions in 1099 processing (BK99):

  • BK – BKDB Only (Exclude OHDB)
  • BO – Both BKDB and OHDB
  • OH – OHDB Only (Exclude BKDB)

If selecting by BK - BKDB Only, then use the first Relate To field (RT01) only, to flag transactions at the Check Level.

For example, Relate To codes can be used in the Bank Reconciliation - Update Check/Deposit Information (BKUPCD) page using the two Relate To fields.

Relate To codes are defined in common codes RT01/XX or RT02/XX where XX is a two-character code. RT01/XX or RT02/XX define the code value, while CK99/RELATEXX places the applicable income into specific boxes on the 1099 form.

Below is a list of the default "Relate To" codes used for flagging transactions in BusinessPlus.

Default Relate To Codes Chart



Box Description

Relate To Codes

Box defined within this common code

Box 1 – Rents

RE



CK99/RELATE01





Box 2 – Royalties

RO

Box 3 - Other Income

PA or PZ

Box 4 - Federal Income Tax Withheld

FW

Box 5 - Fishing Boat Proceeds

FB

Box 6 - Medical and Health Care Payments

MH



CK99/RELATE02





Box 7 - Non-Employee Compensation

CC

Box 8 - Substitute payments in lieu of dividends or interest

SP

Box 9 - Direct Sales of $5000 or more

DS

Box 10 - Crop Insurance proceeds

CI

Box 11 – Reserved for future use





CK99/RELATE03






Box 13 - Excess Golden Parachute Payments

EP

Box 14 - Gross Proceeds paid to an attorney

AF

Box 15b - Section 409A income see 15a below

DI

Box 16 - State Tax Withheld

SW

Exclude from 1099 reporting

EX

Box 15a – Section 409A Deferrals


PEAS/409AXXXX

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