*This post was written for Dynamics NAV but the content directly applies to Dynamics 365 for Financials, which is the cloud product based on Dynamics NAV. You may notice some slight differences in the screenshots, but the information and steps are directly applicable to Dynamics 365 for Financials.
Each year as the 1099 season approaches, I find myself fielding similar questions regarding 1099 processing in Dynamics NAV. Below is a summary of those questions and answers.
Q1: Why doesn’t changing the “1099 Code” field on the vendor card impact the output on my 1099 documents?
A: When reporting on 1099 information, NAV looks directly at the vendor ledger entry table (posted history). Changing the vendor card setup will only impact future postings against the vendor.
Q2: Can I change 1099 information on a transaction after it’s been posted?
A: Yes. If you find yourself in a position where certain vendor ledger entries are missing a 1099 code, have the wrong 1099 code, or have an incorrect 1099 amount; the “1099 Code” and “1099 Amount” fields on the vendor ledger entry page are editable and can be adjusted after the fact.
Q3: NAV includes summary 1099 codes like “MISC” and “INT” in its 1099 code listing. Should I use them?
A: No. These codes are there as headings and should not be assigned to vendors or documents. For example, dollars reported against 1099 code “MISC” won’t show up within the printed 1099, while codes like “MISC-07” and “DIV-03” will.
Q4: The minimum reportable 1099 amount has changed, how do I adjust this setting within NAV?
A: There is a “Minimum Reportable” column within the “IRS From-Box” page. This value can be changed at any time. You can access this page by searching for “1099 Forms-Boxes” or by drilling into the “1099 Code” field on the vendor card.
Q5: Can I create a magnetic media file out of NAV?
A: Yes. Search for “Vendor 1099 Magnetic Media” or navigate to “Financial Management” > “Payables” > “Reports”.
Q6: Why do some vendors appear on the “1099 Information” report, but don’t print as an actual 1099 document?
A: The 1099 documents respect the “Minimum Reportable” setting within the “IRS Forms-Box” setup, while the 1099 Information report does not. Thus, you may see some vendors listed on the 1099 Vendor Information report that have 1099able amounts below the “Minimum Reportable”.
Q7: Does the “1099 Code” and “1099 Amount” fields on a “payment” vendor ledger entry matter?
A: No. If end of the year adjustments need to be made to the vendor ledger entries, only the 1099able invoices and credit memos need to be considered.
Q8: Why don’t all of my 1099able invoices/credits not pull into the 1099 document?
A: Only 1099able invoices/credits that have been applied against a payment within the calendar year will be included. Unpaid invoices will pull into next year’s 1099.
Q9: How do I post an invoice that’s only partially 1099able?
A: Mark the header with the appropriate 1099 code. Then, at the line level, make sure to check/un-check the “1099 Liable” column appropriately. For example, if only half of a $100 invoice is 1099able, you can key in a two line purchase invoice ($50 per line) and only mark one of the lines as “1099 Liable”. Posting this invoice will result in a vendor ledger entry where “Amount” = $100 and “1099 Amount” = $50.
Q10: Should I set the 1099 code on the vendor card or on the document’s header?
A: It depends. I usually suggest that for a vendor that is usually 1099able, the “1099 Code” field on the vendor card should be filled in. For a vendor that is only 1099able on occasion, leave the vendor card’s “1099 Code” field blank, then manually fill in the purchase invoice/order header’s “1099 Code” field manually as needed.