1099 Tax Reporting

1099 Tax Reporting: In the United States, certain types of payments you make to 1099
reportable suppliers needs to be reported to the Internal Revenue Service. As per the US
Internal Tax compliance, 1099 is a tax authority where US federal tax applicable Supplier
Invoices should be in 1099 format. It is a mandatory tax requirement for all US Customers.
Reports will be generated to the Tax Authorities in 1099 format which reduces customization
process.
1099 Preparation Steps:

1. Set up Suppliers for 1099 reporting

Navigation: Supplier  Manage Supplier  Income Tax tab
2. Suppliers defined in Oracle need to have specific fields populated indicating that the
Supplier requires a 1099 including:
 Taxpayer ID (must be 9 digits)
 Federal Reportable box must be selected
 Federal Income Tax Type (to determine which box on the 1099 the amount will go)
 Tax Reporting Name (alternate name to use for the supplier on the 1099 documents) –
OPTIONAL
3. Update Income Tax reportable flag at the supplier site level
Navigation: Supplier > Manage Supplier > Sites > General Tab
4. Enable the supplier site for Income Tax Reporting which will enable site for 1099 reporting
5. 1099 AP Invoice Requirement
Navigation: Invoices > Create Invoice
Ensure that the appropriate AP invoice lines are flagged appropriately.
Invoice distributions contain a field called the Income Tax Type, when this field is populated;
the invoice distribution is “flagged” for 1099 reporting.
Income Tax Type – The MISC code defaults from Supplier record
Income Tax Region – The State code (like FL for Florida) defaults from the Site’s address
6. Setup Tax Reporting Entity: A tax reporting entity is a group or subdivision within a company
that reports VAT separately. According the U.S tax laws, there are only five reporting
entities: individuals, partnerships, corporations, estates and trusts.
Create tax reporting entity from Set up and Maintenance > Manage Reporting Entities
For each “reporting entity”, assign one or more balancing segment values.