Managing 1099 Vendor Updates in Dynamics 365 (and AX 2012)

Occasionally, a Vendor’s 1099 setting may need to be updated based on new information received about the vendor or when the 1099 requirements change.  When this occurs during the 1099 reporting year, an extra step is required in order to apply that change to any 1099 transactions that have been recorded.

Update 1099

An example of a change which requires this extra step would be the recent 1099 requirement changes concerning which form applies to certain types of vendors.  Microsoft provided a hotfix for the tax law changes.

It is a good idea to verify the hotfix updated the 1099 fields as expected by navigating to the 1099 fields form.  In Dynamics 365, navigate to Accounts payable > Periodic tasks > Tax 1099 > 1099 fields.  In Dynamics AX 2012, the path is slightly different:  Accounts payable > Setup > Tax 1099 > 1099 fields.

Once the hotfix is installed, the Vendor records affected by the change in law must be updated.

Once the vendor records are updated, the recorded 1099 transactions must be updated to use the vendor record updated information in order for the correct 1099 report to be generated.  To do this, navigate to the Vendor record that was updated, select the Update 1099 option under Vendor > Tax information.  Provide the date range to update the 1099 transactions for, and select whether or not to update all invoices and payments for this vendor with the new 1099 settings, and whether or not to recalculate the 1099 amounts for the selected transactions.

Note:  The 1099 update may affect any manual 1099 transaction updates previously made for the specific vendor account.

AX 2012:

vendor update tax 1099 dynamics ax 2012

Dynamics 365 Finance & Operations:

vendor update tax 1099 dynamics 365

After the 1099 update has complete, proceed to the Vendor settlements for 1099’s to preview the updated transactions to be reported on the 1099 form.

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