1099 TRAINING

Renee Walery and Bev Haman

Vendor Registry

State Procurement Office

What we will cover today.

Collection of 1099 Information 1099 Maintenance Vendor 1099 Setup Reimbursements to State Employees On-Line Training (voucher and 1099)

COLLECTION OF 1099 INFORMATION

In order to collect the needed paperwork from the vendor, Vendor Registry needs to work closely with the agencies.

COLLECTION OF 1099 INFORMATION

AGENCY’S RESPONSIBILITY

Agencies requiring paperwork from a vendor should include one of the following forms in that paperwork:

COLLECTION OF 1099 INFORMATION

IRS Form W-9 – can be obtained from IRS website http://www.irs.gov/pub/irs-pdf/fw9.pdf or

Individual (Non-Business) Substitute IRS Form W-9 can be downloaded from http://www.nd.gov/eforms/Doc/sfn54309.pdf or

Business Registration Substitute IRS Form W-9 can be downloaded from: http://www.nd.gov/eforms/Doc/sfn53656.pdf

COLLECTION OF 1099 INFORMATION

VENDOR REGISTRY

Vendors who have not submitted the proper paperwork and have reached $600.00 in the current reporting year will be contacted by Vendor Registry, for the proper paperwork.

This query is run periodically, so some vendors may receive more than one notice if they do not respond.

1099 MAINTENANCE

With PeopleSoft, agencies have greater ability to inquire, maintain, and correct their own 1099 reporting from vouchers.

This will involve: Security roles for access Online inquiries and queries Editing 1099 reporting of vouchers

1099 MAINTENANCE

ROLES NDS_ALL_ VENDOR_INQUIRY-This role helps AP

users find the correct vendor and address for payments.

NDC_ALL_1099_MAINTENANCE – This role allows the user to edit the reportable vouchers.

These roles are available to all agencies by completing ConnectND Financials Security access Request SFN 54418 (this form is available on the OMB website http://www.nd.gov/fiscal/authforms.html) .

1099 MAINTENANCE

QUERIES NDS_VNDR_ALT_NAME searches the Name 2 and Alternate

fields. This is a public query – anyone can access it. NDS_VNDR_TIN_SEARCH2 provides the TIN number of a

vendor. This is a private query - contact Renee at the Vendor Registry Office for details.

NDS_ACCOUNT_INQUIRY allows agencies to search all payments charged to a particular account. This is a public query.

NDS_1099_ACTIVITY REPORT - will list all vouchers check marked for 1099 reporting for a specific time frame. This is a public query.

YEAR-TO-DATE REPORTABLE PAYMENTS – Being developed. Will notify when available

1099 MAINTENANCE

INQUIRIES

AP INQUIRY - This tool is very usefully when working with 1099 vendors.

Navigation - “Accounts payable> Review> Vouchers> Voucher Inquiry “

1099 MAINTENANCE

REFERENCE INFORMATION

IRS – http://www.irs.gov – this site provides information needed to handle 1099 reporting.

Vendor Registry - http://www.nd.gov/spo/vendor/registry/ - this site handles all the forms needed to update a vendor’s record.

2006 General Instructions for Forms 1099, 1098, 5498, and W-2G (Rev. December 2005). http://www.irs.gov/pub/irs-pdf/i1099gi.pdf

IRS search for charities: http://apps.irs.gov/charities/charitable/index.html

North Dakota Secretary of State business search https://secure.apps.state.nd.us/sc/busnsrch/busnSearch.htm

VENDOR 1099 SETUP

Understanding how vendors are set up for 1099 reporting aids financial users in using them correctly in voucher payments.

VENDOR 1099 SETUP

NAME SETUP

Definitions: Legal Name – the name used on the taxpayer’s tax

return. AKA – Also known as DBA – Doing business as.

If a vendor supplies a DBA, that name is entered in ‘Name 1’ and the legal name (LN) is keyed into ‘Name 2’. The system allows a search on ‘Name 1’ but not on ‘Name 2’. A query has been developed to search on this field NDS_VNDR_ALT_NAME .

VENDOR 1099 SETUP

VENDOR 1099 SETUP

ADDRESS SETUP

Separate addresses are being created for reportable vendors with the title of 1099 so that we can set up the legal name for reporting purposes.

VENDOR 1099 SETUP

VENDOR 1099 SETUP

By clicking on the “Payment/Withholding Alternate Names” link on this page, you will be able view the legal name that will print on the 1099.

VENDOR 1099 SETUP

VENDOR 1099 SETUP

Setting up the separate address allows the DBA to print on the checks, but the legal name will print on the 1099.

VENDOR 1099 SETUP

LOCATION SETUP

Certain reportable vendors need two locations: one as reportable and another one as non-reportable. That is because they are reportable vendors, but some of what they supply is not reportable (e.g., Dakota Awards, Prairie Rose Data, Dell, etc.)

VENDOR 1099 SETUP

Locations are used for numerous projects for different agencies

Interfaces (i.e., DHSCONT001; 622345; CARS000; BIDS, etc.)

Types of ACH payments (CDBG, NDSU ACH, etc.) Types of payments made by certain agencies

(Service001; Premiums; Grants, etc.) 1099 payments other than 1099 Misc. (1099S; 1099G)

VENDOR 1099 SETUP

IRS Cheat Sheet (sample in your handout)

VENDOR 1099 SETUP

Types of vendors and the IRS codes that would apply for 1099 Misc Reporting.

VENDOR 1099 SETUP

Examples of vendors who are not reportable are:

non-profit organizations, cooperatives government agencies (fed, state, county, city,

etc.)

A vendor’s business type is determined by the documentation received from the vendor by the Vendor Registry.

REIMBURSEMENTS TO STATE EMPLOYEES

Please follow these guidelines when paying employees any type of reimbursement:

When using PeopleSoft Financials, a “state employee” is defined as a worker employed by a state agency on the PeopleSoft payroll system and who has been assigned an EMPL ID.

Workers employed by one state agency and being reimbursed by another state agency, that worker is classified as a “state employee.”

REIMBURSEMENTS TO STATE EMPLOYEES

Travel All state employees being reimbursed for attending a

meeting or conference at your agency’s expense must complete Travel Expense Voucher SFN 52785 – whether they are employed by your agency or another.

SFN 10230 (or similar form) for Non-Employee Travel Reimbursement claims are to be used strictly for individuals not on the state payroll system.

Likewise, account 521060, Non State Employee Travel, only applies to those individuals that do not fit the definition of “state employee.” Use of the correct forms will supply fiscal personnel with the worker’s EMPL ID as a vendor number.

REIMBURSEMENTS TO STATE EMPLOYEES

Other Reimbursements: The EMPL ID vendor should also be used when reimbursing a

state employee for office supplies, tuition, work clothing, or any other non 1099-reportable payments.

Recruitment bonuses and awards to state employees must be paid through payroll even though the individual is not your employee.

Whether the worker is employed by your agency or another, all reimbursements are to be made on the EMPL ID. If the worker is an employee of another agency, he or she can supply the correct EMPL ID for reimbursement.

REIMBURSEMENTS TO STATE EMPLOYEES

Please be patient with the Vendor Registry staff if they ask questions concerning the vendor you requested to be set up. The more information you can supply will help in setting up the vendor properly.

Examples: Grandparent program, foster care providers, caregivers, contracts, etc.

PAYMENTS TO STATE EMPLOYEES

IRS Fact Sheet published June 15, 2006 warns employers to properly classify employees.

Significant increase in IRS payroll tax examinations since April 2005.

APA’s advice: Once an employee, always an employee.

PAYMENTS TO STATE EMPLOYEES

Definitions of honorariums and stipends: Stipend

1. a periodic payment, esp. a scholarship or fellowship allowance granted to a student (w/h class 03).

2. fixed or regular pay; salary (w/h class 07).

Honorarium 1. a payment in recognition of acts or professional

services for which custom or propriety forbids a price to be set (speeches by former presidents, mayors).

2. A fee for services rendered by a professional person (w/h class 07).

PAYMENTS TO STATE EMPLOYEES

Red flags that could trigger an IRS audit: An individual’s filing status as an employee,

then an independent contractor, in the same year.

A business (or state government) reporting a W-2 and a 1099 on the same TIN in the same year.

Further clarification of employee vs independent contractor currently being reviewed by OMB.

QUESTIONS??

Sign-up Sheet

Break

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