Vendor Code/1099 Section Robert E. Byrd, CGFM County Auditor-Controller
Agenda • What is 1099 –Misc Reporting • Type of Payments • Payments Not Required Reporting • Reporting Timeline • Accuracy of Vendor Information • What is the County Departments Role
What is 1099-MISC andWhat does it Mean? • A 1099-Misc is a type of tax form. It is used to report miscellaneous income for vendors who have been paid a total of $600 or more in non-employee payments during a calendar year.
What Type of Payments are Reported on 1099-Misc? • Legal Services • Rents • Prizes/Awards • Medical/Dental Services • Guest Speakers/Lectures • Performers • Child Care Providers • Other Services
Payments Not Required to Report on 1099-Misc • Payments to Corporations (Except payments made for legal/medical services) • Payments for merchandise, telegraphs, telephone, freight, storage • Wages paid to employees (reported on W-2, Wage and Tax Statement)
Payments Not Required to Report on 1099-Misc • Business travel allowances /mileage paid to vendors • Payments to non profit organizations and government agencies
1099-Misc Reporting Timeline • IRS regulation mandates that the Form 1099-Misc is distributed no later than January 31 of the year following payment. • Electronic file is due to the IRS by March 31.
Why is Accurate Reporting of Vendor Information Critical? The County of Riverside annually files to the IRS the reportable amounts paid to each vendor during the calendar year. • The legal name and Tax Identification Number (TIN) in PeopleSoft MUST match exactly with the legal name and TIN on file with the IRS.
Why is Accurate Reporting of Vendor Information Critical? Yearly, the County has paid between $12,000 to $14,000 in penalties to IRS. • For 2007, the penalty amount was $10,450 for 209 vendors with incorrect information. • Penalty notifications were sent to these vendors. 84 vendors responded and have been corrected. This reduced the penalty by $4,200.
Why is Accurate Reporting of Vendor Information Critical? • The ACO is sending a second notification to 125 vendors from the 2007 penalty reporting period. • These vendors did not respond to the first request. If the vendor fails to respond to the second request, then the ACO, on behalf of the County, will apply a penalty at the required 28% rate.
What is the Role of theCounty Departments? • Verify that the vendor information is accurate on the W-9 and matches the IRS 147-C letter OR matches a copy of the Social Security Card. • NOTE: Social Security Number (SSN) or Employer Identification Number (EIN) MUST always have a 9 digit number
What is the Role of theCounty Departments? • If a SSN is used, then the Individual/Sole Proprietor box should be Checked on the W-9 form or AP-1 (substitute W-9 form), AND the legal name should be written in the “Name” field and NOT in the “Business name” field.
What is the County Departments Role? • Please submit all required vendor code documentation (for more specific detail, refer to the MAM presentation of 11/20/08.)
Vendor Code & 1099’s • Vendor Code Section contact list: • Denene Guerrero Guzman 955-3837 • Felix Offor 955-0334 • Jason King 955-5179
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