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Tips to Generate 2019 US 1099 Reporting In Oracle Cloud

Its 1099 reporting time of the year, Payables folks must report certain type of Supplier payments to the IRS.

What are the key considerations to generate US 1099 in Oracle Cloud using US 1099 Report process?

  • Oracle Cloud supports 1099 reporting by Legal Entities for a Reporting Entity. This means that reporting entity set up controls which payment will be included in the 1099 report.
  • Payer information printed on the 1099 form is determined by the Reporting Entity set up.
  • Supplier and Supplier Site 1099 set up definition will be inherited by the Payables invoice. Supplier 1099 set ups should be predefined to report the payment as 1099.  Key Point to note here is, if the supplier and site set ups are defined prior to the invoicing process, 1099 attributes will be defaulted on Invoice lines/distributions. Meanwhile, if the Supplier and supplier site income tax setups are updated after the Payables transaction have been processed, then the Supplier/Site income tax set up can be updated using FBDI templates or manually. Oracle provides “Update and Report Income Tax details” ESS process to update Payables transactions with 1099 attributes after the fact.
  • Commonly used MISC income tax types are supported by Oracle.

More helpful considerations…

  • Payables Invoices should be paid in the reporting year to be included in the 1099 report. Plus, the total payments should be greater than $600.
  • Checks that are voided in the reporting year will not be included in the 1099 report.
  • Standard Oracle reports are available to identify, review and validate the data corrections.
  • Standard Oracle process is available to update the Payables transactions with updated/corrected income tax information.
  • Multiple formats of 1099 Report are supported out of the box – PDF (pre-printed and printed forms), comma delimited and electronic media. Check Oracle support for the latest and the greatest.

What Set ups do I need?

  • Define the Tax Reporting Entity and the corresponding Balancing segments (Legal entities) that will be reported.
  • Supplier should be defined as Federal reportable entity by populating the following fields on the supplier UI Page: Tax payer Country, Tax Payer ID, Federal reportable (Check Box) and Federal Income Tax Type Code (MISCX).
  • Supplier Site should be indicated as a tax reporting site by marking the Income tax reporting site field check box. Take note, only one tax reportable site per supplier is allowed.
  • Validate that the current year 1099 BI Template form has been installed.

Which Exception Processing Reports should I run?

Submit these reports to identify, review, correct and validate US 1099 information on the Supplier and the Invoice transaction record. These reports can be rerun as many times as needed.

  • Submit US 1099 Payments Report by each Reporting entity– Lists payments made to US 1099 reportable suppliers. Use this report prior to printing US 1099 Report to review and validate that all your 1099 Suppliers and their payments have been included. This is especially helpful if it is the first year reporting out of Oracle Cloud. Optionally, you can keep the final version of the US 1099 Payment Report for your year-end record keeping.
  • Submit US 1099 Supplier Exceptions Report by business unit and Reporting entity – Lists Suppliers with inaccurate or incomplete US 1099 income tax information. Use this report prior to submitting the US 1099 report, review and correct the exceptions on the report. Re run the report to verify the corrections to the Supplier record. Re run the reports until all the exceptions have been resolved.
  • Submit Update and Report Income Tax Details in Preview mode ( Income Tax Type Action = Report, Income Tax Region Action = Report) – Reports or updates income tax type or income tax region fields on invoice distributions used for US 1099 reporting. Review the information on the reports that will be updated and accordingly rerun to update the Invoice record in the update mode.
  • Submit US 1099 Invoice Exceptions Report by business unit and Reporting entity – Lists paid invoice distributions with inaccurate or missing US 1099 income tax information. Use this report prior to submitting the US 1099 report, review and correct the exceptions on the report. Re run the report to verify the corrections made to the Invoice record. Additionally, you can correct the data and re run the reports until all the exceptions have been resolved.

Now you can generate US 1099

  • Verify that the US 1099 Supplier Exceptions Report and US 1099 Invoice Exceptions Report do NOT list any exceptions or discrepancies between 1099 Suppliers and the income tax information on the invoices.
  • Verify all 1099 payments for the year have been paid and listed on the US 1099 Payments Report.
  • Submit US 1099 Report or other Oracle process to generate appropriate reports as required (Comma delimited, Electronic Media, 1096 etc.)

References

  • Check for Oracle Supports current year updates in this reference document on MOS – Common Questions Related to 1099 Reporting (Doc ID 1999746.1)

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