1099 Settings (Vendor Defaults)

Learn more

Set up a vendor

Perform other accounts payable tasks

Read the vendor defaults overview

This tab lets you establish how payments made to 1099 vendors should be recorded for 1099 reporting purposes. The 1099 setting reflects the type of payment being made to make sure the amounts appear correctly on the 1099 forms.

In Maintain Vendors, you can specify if a vendor is a 1099 Interest vendor or a 1099 Independent Contractor.

When you make a payment to a vendor with the 1099 type of Interest or Independent Contractor, that payment will be included on the 1099 form for the vendor based on the 1099 settings. On the form, the payment will appear in the box specified in the 1099 settings for the line item G/L account used on the payment or purchase the payment is being applied to. If the 1099 setting for the G/L account is set to None, then that amount will not be included.

Go to the Vendors & Purchases Navigation Center, click the Vendors navigation aid, then select Set Up Vendor Defaults. On the Vendor Defaults window, select the 1099 Settings tab.

1099 Settings

By default, the 1099 settings are correct for paying interest to 1099 Interest vendors and non-employee compensation to 1099 Independent Contractor vendors. If you need to change the 1099 setting for an account, use the drop-down list next to the Account ID and Description to select the appropriate 1099 setting for the account.

Important! You only need to change the 1099 settings for an account if you are paying something other than interest to a 1099 Interest vendor or something other than non-employee compensation to a 1099 Independent Contractor vendor.

If you are paying the 1099 vendor for something that shouldn't be reported on the 1099 form, you should change the 1099 setting to None for the related G/L account. "None" is the last setting in the drop-list so you will need to scroll down the list to find it.

Note: All accounts in your Chart of Accounts are listed, but you only need to make changes to accounts you use when making payments to your 1099 vendors. Typically, these are Expense Accounts, Cost of Goods Sold Accounts, or Inventory Accounts.

For example, you might need to change the 1099 setting for paying rent or reimbursing a 1099 vendor for supplies. .

A common situation is to pay rent to a 1099 vendor. To make sure this amount shows up as rent on the 1099 form, on the Vendor Defaults 1099 settings tab, simply find the rent expense account you use when paying rent to this vendor and change the 1099 setting to 1099-MISC, Box 1.

Another common situation is paying a 1099 vendor for something that shouldn't be reported on the 1099 form, such as reimbursing the vendor for supplies. In this case, you should locate the GL account you use when paying the vendor for supplies (for instance, the Supplies Expense account) and change the 1099 setting for this account to None.

Setting

When to Use

INT Box 1 or MISC Box 7

This is the default setting for all general ledger accounts. Select this to report interest income for vendors with the Interest 1099 type and non-employee compensation for vendors with the Independent Contractor 1099 type.

1099-INT, Box 1

Select this to report interest income for each contractor you have paid at least $10 in interest.

1099-MISC, Box 1

Select this to report income for each contractor to whom you pay rent.

1099-MISC, Box 2

Select this to report income for each contractor to whom you pay royalties.

1099-MISC, Box 3

Select this to report income for each contractor to whom you make other, unspecified payments.

1099-MISC, Box 5

Select this to report income for each contractor you pay in the form of fishing boat proceeds.

1099-MISC, Box 6

Select this to report income for each contractor you pay in the form of medical and health care payments.

1099-MISC, Box 7

Select this to report miscellaneous income for each contractor you pay non-employee compensation of more than $600 annually.

1099-MISC, Box 8

Select this to report income for each contractor who receives substitute payments in lieu of dividends or interest.

1099-MISC, Box 9

Select this to report income for each contractor you pay in the form of direct purchase of $5,000 or more in consumer products that you intend for resale.

1099-MISC, Box 10

Select this to report income for each contractor you pay in the form of proceeds from crop insurance.

1099-MISC, Box 13

Select this to report income for each contractor who has received excess golden parachute payments from your company.

1099-MISC, Box 14

Select this to report income in the form of gross proceeds paid to an attorney.

None

Select this option if you don't want to report either miscellaneous income or interest income .

Reset Default

If you have changed a number of settings and now want to return the accounts to their default settings (Box 1 or Box 7), just click the Reset Default button.