1. 1 1099 Reporting on Vouchers

2. IRS 1099s the Basics Melissa.Fuhrman@da.ks.gov is the new 1099 AccountantMelissa.Fuhrman@da.ks.gov What is a 1099? It is an informational return to report various type of income other than wages. The IRS requires the state to issue 1099s to reportable entities for services, rentals, awards, certain type of grants, interest, dividends, and certain real estate purchases. D of A submits 5 types of 1099 (see coding guide at the end) –1099-MISC: Services, rents, awards –1099-G: Governmental payments (tax refunds are the Dept of Revenue) –1099-INT: Interest –1099-DIV: Dividends –1099-S: Real estate 2 things must occur for there to be 1099 reporting: –The entity must be subject to 1099 reporting –The payment must be reportable 2

3. Is the vendor 1099 reportable? If the vendor is not set up in SMART you must obtain a W-9 What entities are NOT (currently) reportable: –Corporations are NOT reportable UNLESS they provide medical or legal services –Governments –Tax Exempt Organizations What vendors are reportable: everyone else. LLC stands for Limited Liability company. The federal government does not recognize an LLC as a classification for federal tax purposes. An LLC can be a corporation, partnership or sole proprietorship. 3

4. Vendor file and 1099 reporting You must check the withholding box on the vendor Identifying Information tab if the vendor is subject to 1099 reporting Setting up the 1099 types and class –Each location needs the 1099 set up –The default type and class will initially populate on the voucher –Each location should only have one default type –Set up all the classes you anticipate the vendor needing 4

5. Is the voucher reportable Reportable: 01 Rental 02 Royalties 03 Prizes, Awards, other 06 Medical, including medical laboratory service 07 Services including legal 14 Gross Proceeds –payments made to an attorney as part of a legal settlement or court order. –Gross proceeds may be issued in the names of the attorney and the client. –Gross proceeds may include an amount for the attorney’s services. –If you can determine the amount of attorney fees included in the gross proceeds, report the fee in box 7 and nothing in box 14. Not Reportable: –Commodities and refunds (other than the Dept of Revenue tax refunds) 5

6. Vouchers for reportable vendors Online entry defaults with withholding turned on and the default 1099 type and class. Vouchers uploaded via INF02 with the WTHD_SW field blank, T, or Y have withholding turned on, with the default 1099 type and class. How do you remove withholding on a payment voucher? –If you upload vouchers via INF02 enter N in the WTHD_SW field for each invoice line that should not have withholding. –If you key vouchers on-line, click the Invoice Information tab on the voucher. Click the withholding link on the right hand side of the voucher. 6

7. 1099 reportable vouchers For each invoice line that withholding is NOT applicable uncheck the green checkmark on the Withholding applicable box, and the Applicable box (two checks per invoice line). Click “back to invoice”, save the voucher. 7

8. Voucher 1099 reporting is by invoice line. All distribution lines for a invoice line will have the same 1099 reporting. Change the withholding code for each line as appropriate. If you select a vendor type and class that is not set up, the payment will suspend, and Melissa will have to correct it. Please contact the vendor team to change/add 1099 classes. con 8

9. 1099 Account code guide 9 SMART AccountSTARS EsobjTitle1099 TYPE1099 ClassNotes 5231002310REPROGRAPHIC EQUIPMENT RENTAL109901 5232002320BUILDING SPACE RENTAL109901 5233002330EQUIPMENT RENTAL109901 5234002340LAND RENTAL109901 5236002360INFORMATION PROCESSING EQUIPMENT RENTAL109901 5237002370INFORMATION PROCESSING SOFTWARE RENTAL109901 5239002390OTHER RENTALS109901 5241012410REPAIR AND SERVICE - PASSENGER CARS109907 5242012420REPAIR AND SERVICE - OTHER SELF-PROPELLED EQUIP109907 5243002430REPAIR AND SERVICE - MACHINERY,EQUIPMENT,FURNIT109907 5244002440REPAIR AND SERVICE - BUILDINGS AND GROUNDS109907 5245012450REPAIR AND SERVICE-HIGHWAYS AND BRIDGES (276, 7109907 5247002470INFORMATION PROCESSING EQUIPMENT REPAIR & SERVI109907 5248002480INFORMATION PROCESSING EQPT SOFTWARE MAINT & SE109907 5249002490REPAIR AND SERVICE - NOT OTHERWISE CLASSED109907 5251202521HIRE OF CARS, PLANES, BUSES FOR IN-STATE TRAVEL109901Taxable if paid direct to vendor 5251302531STATE CAR EXPENSE FOR IN-STATE TRAVELsee note Repairs are taxable if paid direct to vendor, supplies are not 5251702571RAIL, PLANE, BUS FARES - IN-STATE TRAVEL109907Taxable if paid direct to vendor 5251802581LODGING109901Taxable if paid direct to vendor 5251902591NONSUBSISTENCE ITEMS FOR IN-STATE TRAVELsee note Taxable if paid direct to vendor; conference registration 1099 class 03 5252202522HIRE OF CARS, PLANES, BUSES - OUT-OF-STATE TRAVEL109901Taxable if paid direct to vendor 5252302532STATE CAR EXPENSE FOR OUT-OF-STATE TRAVELsee note Repairs are taxable if paid direct to vendor, supplies are not 5252702572RAIL, PLANE, BUS FARES - OUT-OF-STATE TRAVEL109907Taxable if paid direct to vendor 5252802582LODGING109901Taxable if paid direct to vendor 5252902592NONSUBSISTENCE ITEMS FOR OUT-0F-STATE TRAVELsee note Taxable if paid direct to vendor; conference registration 1099 class 03 5253202523HIRE OF CARS, PLANES, BUSES - INTERNATIONAL TRAVEL109901Taxable if paid direct to vendor 5253302533STATE CAR EXPENSE FOR INTERNATIONAL TRAVELsee note Taxable if paid direct to vendor 5253702573RAIL, PLANE, BUS FARES - INTERNATIONAL TRAVEL109907 Repairs are taxable if paid direct to vendor, supplies are not

10. 1099 Account code guide pt. 2 10 SMART Account STARS EsobjTitle 1099 TYPE 1099 ClassNotes 5253802583LODGING109901Taxable if paid direct to vendor 5253902593NONSUBSISTENCE ITEMS FOR INTERNATIONAL TRAVELvaries Taxable if paid direct to vendor 5262002620HONORARIUMS109907in some cases could be class 03 5263202632COMPUTER PROG AND DATA PROCESS-VENDORS O/T DISC109907 5263302633DATABASE ACCESS FEES-VENDORS OTHER THAN DISC109907 5264002640RECORDING FEES, SERVICING, AND COURT COSTS109907 5265002650LABORATORY FEES109907 5267002670BOARDING HOME PAYMENTS109901 5268002680MAINTENANCE AND TUITION FOR REHABILITATION CLIE109907 5269002690OTHER FEES109907 5269102691CREDIT CARD FEES AND CHARGES109907 5269202692BANK FEES CHARGED BY CONTRACTOR BANKS-REIM TREAS.109907 5269602696E-CHECKS FEES AND CHARGES109907 5269702697MILITARY ACTIVATION PAYMENT109903 5271002710ARCHITECTS AND ENGINEERS109907 5272002720ATTORNEYS AND LAWYERS109907 5273002730PHYSICIANS AND MEDICAL ASSOCIATIONS109906 5274002740HOSPITALS AND NURSING HOMES109906 5275002750ADVERTISING AGENCIES109907 5276002760VETERINARIANS109907 5277002770LECTURERS, SPEAKERS AND ENTERTAINERS109907 5278002780ACCOUNTANTS AND AUDITORS109907 5279102791INFORMATION SYSTEMS CONSULTING FEES109907 5279902700ADMINISTRATIVE SERVICES109907 5279902790professional services109907 5292002920LAUNDRY, DRY CLEANING AND TOWEL SERVICE109907 5295002950NON-EMPL REWARDS,PREMIUMS & BOUNTIES-IRS REPORT109903 5420104200BUILDINGS AND IMPROVEMENTS109907 5420904209BUILDINGS AND IMPROVEMENTS- NON-INVENTORY109907 5431004310LAND AND INTEREST IN LAND1099S01Reportable if Agency is Closing Agent 5431904319LAND AND INTEREST IN LAND - NON-INVENTORY1099S01Reportable if Agency is Closing Agent

11. 1099 Account code guide pt. 3 11 SMART Account STARS EsobjTitle 1099 TYPE 1099 ClassNotes 5440104450BLDGS & GRNDS- LAND IMPROVE (CAPITAL/INV) IRS109907 5440904459BLDGS & GRNDS- LAND IMPROVE (CAPITAL/NONINV) IR109907 5520405204INTEREST INCOME ON UNCLAIMED PROPERTY (670 ONLY1099I01 5520505205DIVIDEND INCOME ON UNCLAIMED PROPERTY (670 ONLY1099D01 5520605206ROYALTY INCOME ON UNCLAIMED PROPERTY (670 ONLY)109902 5528005280PROMPT PAYMENT ACT INTEREST PENALTIES1099I01 5551505515STATE WELF ASST-RENT,SETOFF,IRS REP(171 & 629 O109901 5551605516STATE WELF ASST-MED&HLTH PAY IRS REP(039,171,35109906 5552505525FED WELFARE ASST-RENT,SETOFF,IRS REP(171, 629 O109901 5552605526FED WELF ASST-MED&HLTH PAY SETOFF IRS REP(039,1109906 5558505585HOUSING ASSISTNCE PAYMNTS-DEBT SETOFF IRS REPOR109901 5592005920ROYALTY PAYMENTS109902 5594005940KANSAS BREEDING DEVELOPMENT SUPPLEMENTS(553 ONL109903 5595005950INT INCOME:APPL DEP REF(553),BUS TAX REF(565) O1099I01 5598005980AGRICULTURAL CONSERVATION PROG PMTS(634 ONLY)1099G06

12. Account codes with more than one type or class 12 SMART AccountTitle1099 TYPE 1099 ClassNotes 5524005240WORKERS' COMPENSATION CLAIMS(AGENCY 173 & 331 ONLY Not reportable 5524005241GROSS PROCEEDS PAYMENTS TO ATTORNEYS FOR WORKERS 1099 14Reportable 5527005270CIVIL RIGHTS CONCILIATION CLAIMS 1099 03 5527005271GROSS PROCEEDS PAYMENTS TO ATTORNEYS FOR CIVIL 1099 14 5529005290OTHER CLAIMS 5529005291GROSS PROCEEDS PAYMENTS TO ATTORNEYS FOR OTHER 1099 14 5529005292OTHER CLAIMS - NON WAGE PAYMENTS 1099 03 555100 5510DIRECT STATE WELFARE ASSISTANCE (AGY 039,629 ON109907 5551005514STATE WELFARE ASSISTANCE-NOT SETOFF,NOT IRS REPORT none 5551105512STATE WELF ASST-SETOFF,IRS REP(171 & 629 ONLY)109907 5551105511DIRECT STATE WELFARE ASSISTANCE-SETOFF,NOT IRS REP none 555200 5520DIRECT FED WELFARE ASST-AGY 039,171,629 ONLY109907 5552005524FEDERAL WELFARE ASSISTANCE-NOT SETOFF,NOT IRS REPO 5552105522FED WELFARE ASST-SETOFF,IRS REP(171, & 629 ONLY109907 5552105521FEDERAL WELFARE ASSISTANCE-SETOFF,NOT IRS REP 5559005590OTHER STATE SPECIAL GRANTS (206,300,350,629,683) 5559005590OTHER SPECIAL GRANTS-IRS REPORTABLE1099G05 5559005591OTHER SPECIAL GRANTS-IRS REPORTABLE1099G06 5559005596OTHER SPECIAL GRANTS-IRS REP MED & HLTH PAYMENTS1099G06 5295002950NON-EMPL REWARDS,PREMIUMS & BOUNTIES-IRS REPORTABL109903 5295002954NON-EMPL AWARDS,REWARDS,PREMIUMS &BOUNTIES-NOT IRS