Companies with the Same Tax ID

If a company or legal entity owns several companies or business units that share the same tax ID, you must prepare 1099 returns for the legal entity, and not for the individual companies. This means that you must combine the amounts that the individual companies (payers) paid to the same supplier.

Because the system enables you to specify up to five alternate addresses for each company, you can use the alternate address number of the legal entity as one of the alternate addresses for each company. Later in the 1099 process, you specify which of the alternate addresses the system must use to combine the payments that the individual companies made to one supplier.

For example, Smith Construction Company (your company) owns Johnson Fabrications Incorporated (another company). Each company made payments to Marshall Electrical Systems, a supplier. You must create a 1099 return only for the legal entity, Smith Construction Company. You specify Smith Construction Company as one of the alternate addresses for Johnson Fabrications Incorporated. This action enables the system to combine and record the payments that both companies made to Marshall Electrical Systems, on the 1099 for Smith Construction.