Keeping Up with 1099 Reporting Concepts for Calendar Year 2017

As we rapidly approach the end of calendar year 2017, many of our customers are beginning to focus on 1099 processing. I had the opportunity recently to attend a 1099 Reporting Concepts Workshop held at the Folsom-Cordova Unified School District in Rancho Cordova. The workshop was led by Sondra Dougherty, CPP (Certified Payroll Professional) whose experience includes over 2 decades at the Orange County Department of Education in the areas of Payroll/HR and Accounts Payable.

A few of the topics covered in this all-day training included an in-depth look at Reporting Forms for 1099 Miscellaneous Payments, Correction Forms and Processing, as well as Federal and State Filing Requirements.

Sondra shared a wealth of information, including many examples from her own experiences with 1099 processing at Orange County. She also gave us little quizzes throughout the day to ensure that we understood the material!

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Here are a few topics that were included in the training:

  • Rules and breakdown of the Federal and State Backup Withholding required if a vendor does not provide a Taxpayer Identification Number (TIN) for 1099 reportable payments.
  • Guidelines for California Reporting relative to Independent Contractors and Non-Residents.
  • Handling of IRS “B” Notices, which tells a payer that he/she may be responsible for backup withholding due to missing or potentially incorrect TINs during the processing of Form 1099 information returns.

In order to avoid B-Notices, the IRS offers an awesome interface program that I am excited to share with our customers! The On-Line Taxpayer Identification Number (TIN) Matching Program is a free web-based tool offered by the IRS through e-services. It was established for payers of reportable payments subject to the backup withholding provisions of section 3406 of the Internal Revenue Code. This program allows a participant to check the TIN furnished by the payee against the name/TIN combination contained in the IRS database prior to filing an information return. 

There are two TIN matching options offered through e-services:

Interactive TIN Matching
Verify up to 25 name/TIN combinations and results will be received immediately. The user can input name/TIN combinations in groups of 25; there is a limit of 999 requests during a 24 hour period.

Bulk TIN Matching
Verify up to 100,000 name/TIN combinations and results will be received within 24 hours.

As the Escape Subject Matter expert for 1099 Processing, I am grateful to be a resource for our customers, ensuring that we are keeping up with important regulatory changes.