Understanding Category Code 07 Values for Address Book Records

After you set up values in UDC table 01/07, you can assign a category code 07 value on the address book record of a supplier to identify the type of 1099 return and specify the box for 1099 processing. The system uses this as the default value for every voucher and voucher pay item that you process for the supplier.

Note: You must use a valid two position code. Example A9 - Crop insurance proceeds.

Review these examples, which show how the business type of a supplier affects the type of 1099 form and box in which you report 1099 amounts and, as a result, the category code 07 value that you assign to the address book record:

• Johnson Specialty Painting supplies contractor services.

  You report payments in box 1 of Form 1099-NEC; therefore, you must assign a category code 07 value of B1 (box 1 for nonemployee compensation or contractor)) to Johnson Specialty Painting.

• Douglas LTD Partnership supplies rental space.

  You report payments in box 1 of Form 1099-MISC; therefore, you must assign a category code 07 value of A1 (rent) to Douglas LTD Partnership.

• Smith & Sons supplies patent licenses.

  You report payments in box 2 of Form 1099-MISC; therefore, you must assign a category code 07 value of A2 (royalties paid for use of a patent) to Smith & Sons.