Understanding 1099 Processing for Foreign Suppliers

If you make payments to suppliers with mailing addresses outside of the U.S., you might be required to identify them as foreign suppliers when you submit their 1099 returns. A foreign supplier is eligible for a 1099 form if these fields on their address book record contain the specified values:

• Person/Corporation Code field is P (individual) or N (noncorporate entity).

• Payables Y/N/M field is F (foreign).

If a supplier master record is specified as foreign, but does not include an individual or noncorporate designation, the system issues the error message Invalid Person/Corporation Code when you run the Build A/P Workfile program (R04514FP). To correct the error, you must enter P or N in the Person/Corporate Code field in the address book record for the supplier and rerun the program. The values in the Person/Corporation Code and Payables fields are used for tax purposes only; they do not affect any other software process except 1099s.