Reviewing 1099 UDCs
Before you can process 1099 returns using the A/P Ledger method, you must ensure that you set up the UDCs that you need. To select voucher pay items for 1099 processing, the A/P Ledger method uses the following UDCs:
UDC |
Description |
---|---|
04/TR - Type of Return - 1099s |
Required. The values for UDC 04/TR are included in the software and are hard coded. These values specify the type of 1099 form and which box on the form to print supplier amounts. You use these values in the Type of Return processing option for the Build A/P Workfile program (P04514FP). |
01/07 - 1099 Reporting Code |
Optional. The values for UDC table 01/07 (1099 Reporting Code) are user-defined, but most clients use the same values as those in UDC 04/TR. |
Reviewing UDCs includes the following tasks:
Reviewing the Type of Return UDC 04/TR
Copying the Values from UDC 04/TR to 01/07
Reviewing the Type of Return UDC 04/TR
The system uses the UDC code to select the supplier records for each form and box combination when you build your A/P workfile and when you print your 1099 forms.
The codes in UDC table 04/TR are hard-coded and you should not change or delete them. Each UDC code consists of two characters. The first character specifies the type of form, as follows:
First Character |
Type of Form |
---|---|
A |
1099-MISC |
1 |
1099-DIV |
6 |
1099-INT |
B |
1099-NEC |
The following tables list the valid values for UDC table 04/TR, the box name on the preprinted 1099 form, the corresponding box number, and the amount code on the electronic file for each type of 1099 form.
1099-MISC
Values in UDC 04/TR |
Box Name |
Box Number |
Amount Code |
---|---|---|---|
A1 |
Rents |
1 |
1 |
A2 |
Royalties |
2 |
2 |
A3 |
Other income |
3 |
3 |
A4 |
Federal income tax withheld |
4 |
4 |
A5 |
Fishing boat proceeds |
5 |
5 |
A6 |
Medical & health care products |
6 |
6 |
A7 |
Direct sales indicator Note: An X prints in Box 7 and there is no amount to report on electronic media, so Amount Code 7 does not exist. |
7 |
See Note |
A8 |
Substitute payments in lieu of dividends or interest |
8 |
8 |
A9 |
Crop insurance proceeds |
9 |
A |
AD |
Excess golden parachute payments |
14 |
B |
AA |
Gross proceeds paid to an attorney |
10 |
C |
AC |
Section 409A deferrals |
12 |
D |
AE |
Nonqualified deferred compensation |
15 |
E |
AF | FATCA filing requirement | 13 | |
AG |
Prior Year Nonemployee Compensation |
The nonemployee compensation (NEC) amount for the prior year is not printed on the 1099- MISC paper forms. The system uses this UDC to include the NEC amount for the prior year in the electronic filing for the MISC form. For this UDC, enter the amount by using the AP Adjustment program. This UDC is required due to the nonavailability of the NEC form before the financial year 2020. |
G |
1099-DIV
Values in UDC 04/TR |
Box Name |
Box Number |
Amount Code |
---|---|---|---|
11 |
Total ordinary dividends |
1a |
1 |
12 |
Qualified dividends |
1b |
2 |
1A |
Total capital gain distributions |
2a |
3 |
1B |
Unrecaptured section 1250 gain |
2b |
6 |
1C |
Section 1202 gain |
2c |
7 |
1D |
Collectible (28%) rate gain |
2d |
8 |
1K | FATCA filing requirement | 11 | |
1F |
Exempt Interest Dividends |
12 |
F |
1G |
Specified Private Activity Bond Interest Dividends |
13 |
G |
13 |
Nondividend distributions |
3 |
9 |
14 |
Federal income tax withheld |
4 |
A |
1H |
Section 199A dividends |
5 |
5 |
15 |
Investment expenses |
6 |
B |
16 |
Foreign tax paid |
7 |
C |
18 |
Cash liquidation distributions |
9 |
D |
19 |
Noncash liquidation distributions |
10 |
E |
1099-INT
Values in UDC 04/TR |
Box Name |
Box Number |
Amount Code |
---|---|---|---|
6A |
Market discount |
10 |
A |
6B |
Bond premium |
11 |
B |
6D |
Bond Premium on Tax Exempt Bond |
13 |
D |
61 |
Interest income not included in Box 3 |
1 |
1 |
62 |
Early withdrawal penalty |
2 |
2 |
63 |
Interest on U.S. Savings Bonds and Treasury obligations |
3 |
3 |
64 |
Federal income tax withheld |
4 |
4 |
65 |
Investment expenses |
5 |
5 |
66 |
Foreign tax paid |
6 |
6 |
68 |
Tax exempt interest |
8 |
8 |
69 |
Specified private activity bond interest |
9 |
9 |
6E |
Bond premium on Treasury Obligation |
12 |
E |
1099-NEC
Values in UDC 04/TR |
Box Name |
Box Number |
Amount Code |
---|---|---|---|
B1 |
Nonemployee Compensation |
1 |
1 |
B4 |
Federal Income Tax Withheld |
4 |
4 |
Copying the Values from UDC 04/TR to 01/07
The values in UDC table 01/07 (1099 Reporting Code) identify the different types of 1099 forms and boxes on each form. The system stores this category code in the supplier's address book record in the Address Book Master file (F0101). When you enter vouchers for the supplier, the system automatically updates the category code 07 value to the 1099 Reporting field (RPAC07) in the Accounts Payable Ledger file (F0411).
If you choose to use address book category code 07 for 1099 processing, you must set up valid values in UDC table 01/07.
Set up only the values that you will use based on the form and box numbers of the 1099 returns that you plan to produce, such as A1 (IRS form 1099-MISC, Box 1) or 61 (IRS form 1099-DIV, Box 1). This ensures that the values in UDC table 01/07 are consistent with those in UDC table 04/TR.
Set up the value EX (exempt), if some of the pay items are exempt from 1099 reporting, such as freight. When you enter a voucher for a supplier that is eligible for 1099 reporting, but it includes exempt pay items, assign EX in the 1099 Reporting Code field.
If you have not set up any of the 1099 values in UDC 01/07, you can copy them from UDC 04/TR to 01/07. If any of the UDC values already exist in 01/07, the system displays an error for duplicate values. You can either:
Remove all the values from UDC 01/07 and then copy the type of return values from UDC 04/TR.
Add the values manually using the values for the 1099 forms in the prior tables.
Navigation
On the Command Line, enter UDC
On Voucher Document Types, enter 04 in the System Code field.
Enter TR in the User Defined Codes field and click Inquire.
Page down until you reach the end of the codes.
Enter 01 in the System Code field.
Enter 07 in the User Defined Codes field and Click Add.
Click Inquire to verify that all the codes copied correctly.