Income Tax Regions Window Reference
Abbreviation. The abbreviation for an income tax region. Payables uses the abbreviation to identify a unique tax reporting authority. The abbreviation must be unique. After you save a tax region, you cannot update or delete it, but you can specify effective dates if you want to make it inactive.
You can specify a single region when you submit the Update Income Tax Distributions Report. You can specify a single region or all regions when submitting the 1099 Payments Reports.
Code. The unique numeric region code determined by the Internal Revenue Service. The code cannot exceed two digits. You need to ensure that the code you define for a tax region exactly matches the code defined by the Internal Revenue Service to ensure correct Combined Filing reporting information. Payables produces B and K records in its 1099 Tape Program only for region codes that you define in this window or that are predefined.
Description. The description of your income tax region.
Reporting Limit
Amount. The reporting limit amount for a region. Contact your tax authorities to obtain information regarding their 1099 tax reporting requirements. If the total 1099 MISC payments equal or exceed the Reporting Limit Amount, Payables includes these payments in the 1099 reports for that tax region. Payables uses this Reporting Limit Amount with the next field, Reporting Limit Method, to determine if the 1099 MISC payments are required to be reported. If you do not enter an amount, Payables assumes the limit to be zero.
Method. The comparison method that you want Payables to use when determining which 1099 MISC payments will be reported to the tax authorities you define here. Contact your tax authorities to obtain information regarding their 1099 tax reporting requirements. Payables uses this Reporting Limit Method with the previous field, Reporting Limit Amount, to determine what payments are required to be reported. If the total 1099 payments equal or exceed the Reporting Limit Amount based on the Reporting Limit Method you select here, Payables includes these payments in the 1099 reports for that tax region. You can select one of the following reporting methods for each tax region:
- Compare Individually. Payables compares to the region's Reporting Limit Amount, payments made to a supplier by each individual 1099 MISC Type. For example, region X's reporting limit is $600. If you make a total of two $400 payments to a supplier in region X and classify each payment as a different 1099 MISC Type, Payables will not report this supplier to region X because neither individual payment type exceeded region X's reporting limit. In this case, Payables only reports the supplier to the Federal tax authorities.
- Compare Sum. Payables compares to the region's Reporting Limit Amount, the sum of all 1099 MISC Type payments made to a supplier in a specific region. For example, region X's reporting limit is $600. If you make a total of two $400 payments to a supplier and classify each payment as a different 1099 MISC Type, Payables will report this supplier to the region X tax authority because the sum of the payments exceeds region X's reporting limit. In this case, Payables reports the supplier to both federal and state tax authorities.
- Same as Federal. Payables compares payments made to a 1099 supplier to the Federal reporting limit. Payables does not use the region's reporting limit.
Effective Dates
The effective dates for the region. You can enter one date, both dates, or neither. If you define effective dates, if the current date falls outside of the effective dates, Payables will not include the region on a list of values, and will not allow you to enter the region when you assign an income tax region to an invoice distribution.
