1. Implementing Payables Invoice to Pay
  2. Income Tax Reporting Options

Income Tax Reporting Options

Use the Manage Tax Reporting and Withholding Tax Options task to manage the following income tax reporting options for an invoice business unit:

  • Use combined filing program

  • Use supplier tax region

  • Income tax region

  • Include withholding distributions in income tax reports

Use Combined Filing Program

Enable this option if you're using US 1099 Combined Federal and State Filing Program reporting. When you submit the US 1099 Electronic Media Report, K records are produced for all tax regions participating in the program that have qualifying payments.

Tip: If you file tax information with the Internal Revenue Service electronically and don't use the combined filing program, don't enable this option.

Use Supplier Tax Region

This option is used with combined filing. You can enable this option to use the tax region from US 1099 suppliers as the default tax region on invoice distributions. If needed, you can override the tax region on the Manage Distributions page. If you enable this option, you could have as many K records as you have different supplier tax regions.

Income Tax Region

This option is used with combined filing. You can forward US 1099 payment information to one tax region, regardless of the tax regions your US 1099 suppliers do business from. If you enter a value in the Income Tax Region field, you might have only one K record. If needed, you can still override the tax region on an invoice distribution.

Include Withholding Distributions in Income Tax Reports

Enable this option to report on federal income tax withheld for US 1099 suppliers. The withholding tax distributions that are automatically created have an:

  • Income tax type of MISC4 for reporting in box 4 on the 1099-MISC form

  • Income tax region, if combined filing is enabled

Note: If you manually create withholding tax lines, then you must enter the income tax type and income tax region manually.

When you enable this option, the Update 1099 Withholding Tax Distributions process runs. This process updates the income tax type and income tax region on existing withholding tax distributions. The process selects distributions to update as follows.

If the current date is:

  • Before March 1 of the current calendar year, distributions with a payment date of January 1 of the previous calendar year or later are updated.

  • March 1 of the current calendar year or later, distributions with a payment date of January 1 of the current year or later are updated.