1099 Reporting

About this Policy

1099 Reporting

Policy Number: 22301

Effective Date:

Last Updated:

Responsible Office:
UM System Controller's Office

Responsible Administrator:
UM System Controller

Policy Contact:

Accounts Payable Shared Services
University of Missouri Health Care Controller’s Office

Categories:

Finance

Request additional information

The quality of the University’s 1099 reporting depends upon the information entered at the time of payment request/voucher and invoice processing as well as when the Supplier is established. To ensure accurate Supplier classification, the University requires an IRS form W-9 for domestic Suppliers and an IRS form W-8 for foreign Suppliers. Exceptions to this requirement may be granted at the discretion of the Accounts Payable Shared Services (APSS) Director or the University of Missouri Health Care (MUHC) Controller’s Office. Each payment request/voucher must have the appropriate Account coded by the requestor or approver for the proper withholding type. APSS and the MUHC Controller’s Office are responsible for reviewing the appropriate withholding type and adjusting when appropriate.

Payment requests or vouchers that have a payment to a Supplier that includes both taxable and non-taxable items must contain multiple lines. Taxable items must be recorded on a separate line from the non-taxable items to be able to extract the taxable 1099 reportable expense for purposes of creating a 1099 for the Supplier.

It is the responsibility of APSS and the MUHC Controller’s Office to review the information in the voucher and payment tables at calendar year end to determine the accuracy of the data and correct any errors. Correction of the errors must be completed before the deadline for 1099 submission each year. The due date for these corrections is determined by UM System Controller’s Office and is typically early-January for prior year reporting.

All B notices will be reviewed on a case by case basis. Tax identification number or name errors should be corrected on the Supplier record in PeopleSoft before the next 1099 report is submitted. If a second B notice is received for the Supplier, a hold will be placed on the Supplier and payments will not be allowed to the Supplier until a proper W-9 or W-8 Form is received.

Definitions

Account - a 6 numeric character field used to describe and classify transactions according to uses and/or regulations, restrictions or limitations in compliance with financial reporting requirements. The University uses separate ranges to designate the transaction as revenue, expense, net assets, asset or liability. For a listing of Accounts, go to Account under PeopleSoft ChartFields and MoCodes at https://umsystem.edu/ums/fa/controller/peoplesoft.

IRS B notice - an annual notice from the IRS to notify payers that a 1099 form has been filed with either missing or incorrect name/tax identification number combinations. A second B notice is issued if there has been two mismatches for the same Supplier within three calendar years.

Form 1099-MISC - an IRS tax form that reports the calendar year-end summary of all non-employee compensation. The 1099-MISC form covers rent, royalties, self-employment and independent contractor income, crop insurance proceeds and several other kinds of miscellaneous income.

Supplier - a person or company offering something for goods or services. Within PeopleSoft, a Supplier is a unique individual or company who is eligible to receive payment.

W-9 or W-8 Form - an IRS form used to verify a person’s or company’s taxpayer identification number often referred to as TIN. A W-9 form is used for domestic suppliers while a W-8 form is for foreign Suppliers.

Accountabilities

UM System Controller’s Office:

Create the 1099 file in IRS mandated format and verify data
Facilitate a review of 1099s with data in multiple reporting categories (boxes). Each of these must be reviewed to determine if the multi-box status is accurate.
Collect and review payments from the Medical Malpractice Accounts and provide to APSS for entry
Collect and review payments made to deceased employees and provide to APSS for entry
Submit 1099 file to IRS
Provide guidance as needed regarding compliance with 1099 regulations
Review the annual notices sent from the IRS and send out the appropriate B notice letters to suppliers, and track the responses
Provide any B notice related updated W-9 or W-8 to the accounts payable functional lead to update the supplier file.
Request that the accounts payable functional lead put the suppliers that receive the second B-Notice on “payment hold” until the proper W-9 or W-8 is received

APSS and MUHC Controller’s Office:

Review Supplier Registrations to ensure a W-9 or W-8 was received
Validate all other data received on the Supplier Registration, code the supplier as either withholding (will generate a 1099) or non-withhold (will not generate a 1099) and approve the Supplier
Enter the Medical Malpractice payments provided by the Controller’s Office
Enter the deceased employee payments provided by the Controller’s Office
Review payments at calendar year end for accuracy with 1099 reporting

Department Employees:

Accurately complete the Supplier Registrations with data that describes the type of payments to be made to the Supplier
Gather the completed IRS form W-9 or W-8
Enter the correct Supplier classification
Create separate invoice lines on a payment request when paying a Supplier for an item that is taxable and for an item that is non-taxable