1099 Questions

Question

I have the following 2 questions regarding 1099’s.  One has to do with the fact that I read somewhere that after you have added tax number information to a vendor (s), that there is a program that you need to run so that SAP will flag the appropriate previously recorded payment information so that it will be reported on the vendor’s 1099.  Can someone please tell me what the program name is?
Second question has to do with the Payer’s (company code) name, address, and tax identification number that appears on the 1099..  Where is this entered into the system.  When I print out my 1099’s for 2007, this information is blank (I have the recipient’s information but not the payer’s).  I am sure that there is some configuration type setting or master data that I have failed to enter.  I would appreciate it if someone would tell me where I need to enter this information.
Thanks in advance for your assistance.
Greg Brown
FI/CO consultant

Answer 1

Hi Greg,
Below is the sequence of steps to process the 1099 (SAP term Withholding Tax) vendor invoice –
1.     Enter WT tax type, WT tax code and check mark ‘liable’ box in the vendor master.
2.     Enter only those relevant tax types and tax codes that are really applicable to that vendor master. Entering additional/non-relevant tax type and code in vendor master do not do any good instead it will increase additional work at the time of recording vendor invoice.
3.     At the time of recording vendor invoice, WT types and codes information moves from vendor master to the transaction screen and per configuration full invoice value will be assumed subject to 1099 information.
4.     If the vendor master has multiple lines of WT types and codes then at the time recording vendor invoice go to WT tab and enter $0.00 to those lines that are not applicable. If the full amount invoice is not subject to 1099 information but only part of the invoice amount then enter only that $ amount in the column WT base column. For example vendor invoice is entered for repayment of principle amount + accrued interest then enter only interest amount in appropriate WT line. Repayment of capital amount is not subject to 1099 reporting.
5.     If the invoice is entered with WT code that requires withhold back tax and pay to IRS the tax amount e.g. tax code D2 that has 31% back tax, then at the time payment of invoice, using t.code F110 or F-58, system will calculate back tax automatically. Invoice will be paid less by back tax. Back tax amount will be recorded in GL.
6.     Incase vendor invoice is to be paid though manual check or wire transfer (over the telephone and not system generated) and subsequent recording is to be done through t.code F.53 then calculate the WT manually and pay the remainder of the amount. On the open item screen of t.code F.53 payable will show net of back tax and on saving of document it will trigger the automatic entry to GL for back tax.
7.     Execute program RFWT0020 after step 8 to populate WT information to already posted/paid invoices and verify the correctness.
8.     Please work with program RFIDYYWT to generate electronic file for yearly IRS reporting. On this please stay with SAP delivered standard WT tax codes and type that will ease in 1099 reporting.
Important OSS note in this are – 363650 and 649417.
If this is usefull,please assign points.
Thanks,
Rau