AUDITOR OF STATE

1099 INFORMATION ADVANCE ACCOUNTS PAYABLE

TRAINING

August 1, 2013 Fred Van Dorp

Dan Bastin

1099 REPORTING AND ACCOUNTS

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WHAT IS 1099 REPORTING? Report to vendors and IRS of at the end

of the calendar year payments made IRS rules establish

When 1099 reporting is required Required for payments made in the course of

a trade or business What vendors are included

All vendors included unless specifically excluded by IRS rules

What payments are included All payments included unless specifically

excluded by IRS rules

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HOW IS AOS 1099 REPORTING DONE ? Vendors in PeopleSoft are classified

according to IRS classification rules and a 1099 reporting status code is assigned to the vendor The 1099 Reporting Status Codes currently

in use are EXMPT

Used for tax exempt and government entities CORP

Used for incorporated entities OTHRR

Used for all other entities

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HOW IS AOS 1099 REPORTING DONE ?

All general ledger accounts in PeopleSoft are assigned 1099 reporting codes in accordance with IRS reporting rules and IRS payment categories

1099 Reporting Codes currently in use are RE for rent payments MH for medical services payments NC for payments for services provided by

non-employees SP for lawsuit settlement payments to

attorneys LA for land acquisition payments PA for all other 1099 reportable payments NO for non-reportable payments

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HOW IS AOS 1099 REPORTING DONE ?

The 1099 codes are referred to as 1099 code attributes

There is a 1099 code matrix for every account

The 1099 code matrix is the combination of vendor status codes and account 1099 codes

In other words for every account there is a 1099 code associated to each vendor status because the 1099 reporting does vary by vendor status

The 1099 code associated to the OTHRR vendor status is considered the primary 1099 code for the account

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HOW IS AOS 1099 REPORTING DONE ? From the ENCOMPASS Project Home Page

you can navigate to an Excel worksheet containing all accounts and the 1099 code attributes

The navigation is ENCOMPASS Documents Chart of Accounts ACCOUNT_ATTRIBUTES_(date)

Later in this presentation Fred will demonstrate using the worksheet

Don’t find an account that fits your need, then submit a GMIS issue

Questions send to AccountingDept@auditor.in.gov

Focus Area #1 Selecting the correct account code Scenario A –

Vendor A is providing a training course on Time Management. The course will cost $5000. The State will pay Vendor A directly.

Scenario B – Employee B went to a training course

on Time Management. The course was $700. She paid the Vendor directly and is seeking reimbursement from the State.

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What account codes should be used for these two scenarios?

1099 Tools

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http://myshare.in.gov/SBA/encompass/Shared%20Documents/Forms/AllItems.aspx?RootFolder=%2fSBA%2fencompass%2fShared%20Documents%2fChart%20of%20Accounts&FolderCTID=&View=%7bF028AA1A%2d92F6%2d481F%2dAD3C%2dA6A404494279%7d

1099 Tools -

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GL_ACCOUNT_TBL_120112

1099 Tools -

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ACCOUNT_ATTRIBUTES_120112

Focus Area #1 Selecting the correct account code Scenario A –

Vendor A will be paid using account 535014.

Scenario B – Employee B will be reimbursed using

account 581020. If account 535014 was used, then a 1099 would be generated and sent to Employee B for $700.

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Focus Area #2 –Reimbursing vs. Direct Payment Scenario C –

Employee C occasionally buys materials for the copier for her agency on her way to work. Over the last year, she has paid $1,000 to Staples, and was reimbursed by the State.

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What account codes should be used for this scenario?

1099 Tools -

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GL_ACCOUNT_TBL_120112

1099 Tools -

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ACCOUNT_ATTRIBUTES_120112

Focus Area #2 –Reimbursing vs. Direct Payment Scenario C –

Whenever possible, the State should buy its own supplies and should pay Staples directly.

If account 533033 was used for these “reimbursements,” then a 1099 would be generated and sent to Employee C for $1,000.

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Recap Review the accounts that you are using

Account codes can have similar descriptions, but significantly different 1099 attributes

Review your policy for reimbursement State should pay vendors directly whenever

possible Account attributes are on the

Encompass website Focus on the OTHRR attribute

Account 1099 Attribute questions can be directed to AccountingDept@auditor.in.gov

Account questions, unrelated to 1099 attributes, will continue to be directed to Mary Reilly

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QUESTIONS

Contact Information Fred Van Dorp

317-234-1667 fvandorp@auditor.in.gov

Dan Bastin 317-232-3309 dbastin@auditor.in.gov