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E1: 1099: 2020 Year End Tax Reporting Changes for 1099 MISC and 1099 NEC (Doc ID 2668914.1)

Last updated on OCTOBER 21, 2020

Applies to:

JD Edwards EnterpriseOne Accounts Payable - Version 9.2 and later
Information in this document applies to any platform.

Details

 

1. Overview

Starting with the 2020 1099 Year-End reporting, Nonemployee Compensation is no longer reported on the 1099 MISC form - box 7.  Instead, it is reported on form 1099 NEC (Nonemployee Compensation).  

In addition, the 2020 1099 MISC form layout has changed with several boxes being in different positions. 

For more information, please visit https://www.irs.gov/

JD Edwards EnterpriseOne will provide copy B for the new 2020 1099 NEC form, as well as updated 1099 MISC, 1099 DIV and 1099 INT forms in the Year-End ESU.  The new and updated forms will be available when the 1099 ESU is released, which is scheduled for the fall of 2020.  For the latest ESU information, please review E1: 1099: Overview ESU And Release Information, Minimum Technical Requirements, Known Issues, Software Changes and Resources For EnterpriseOne Financials 1099 Year End Processing (Doc ID 2388271.2).  

To ease the transition to the new form, you can already start preparing your data and adjust your setup for the upcoming changes.  

JD Edwards EntrpriseOne is offering clients who are on release 9.2 the opportunity to test the upcoming changes now by delivering an ESU for testing purposes. For more details, please refer to document E1: 1099: 2020 Year End Tax Reporting Changes for 1099 MISC and 1099 NEC ESU for Testing Purpose Release EnterpriseOne 9.2 (Doc ID 2690705.1)

The information below details setup changes, as well as the tools available to reclassify existing 2020 voucher records if required:

 

1099 MISC:

  

 

1099 NEC: 

  

 

Details on the required setup changes are documented below.

 

DISCLAIMER

Please note that the information in this document may be subject to change, due to any potential future IRS changes.  For more on these and any future changes, please go to the IRS’ website, www.irs.gov or consult with your tax advisor(s).

 

2. Accounts Payable Method

2.1. Data Back-up

It is recommended that a back-up of the following tables is created of the 2019 1099 data and setup for audit purposes:

 

2.2. Update UDC Tables 01/07 and 04/TR

2.2.1. Add New Values to UDC Tables 01/07 and 04/TR

Add new values for Nonemployee Compensation and Federal Income Tax Withheld in UDC tables 01/07 and 04/TR.  The value of B denotes the 1099 NEC form and the number (1 or 4) the box on the form: 

UDC 01/07

UDC 04/TR 

2.2.2. Update Existing Values in UDC Tables 01/07 and 04/TR

Update existing values in UDC tables 01/07 and 04/TR for the boxes that have been modified on the 2020 100 MISC form:  

UDC 01/07

UDC 04/TR

2.2.3. Delete Existing Value in UDC Tables 01/07 and 04/TR

Delete the existing UDC value AB in both UDC 01/07 and 04/TR.

 

2.3. Update Supplier Category Code 07

After setup changes have been made to UDC tables 01/07 and 04/TR, update the Supplier Master Category Code 07 default value.  The value of this field defaults in when entering vouchers.  

There are two options available:

Caution:

When running this report, review all the fields to ensure fields are not being changed incorrectly.  Oracle recommends to run this UBE in a test environment first.

For more information, please refer to chapter 7.3 Updating Category Codes in the JD Edwards EnterpriseOne Applications Address Book Implementation Guide.

 

2.4 Update Voucher Category Code 07

After setup changes have been made to UDC tables 01/07 and 04/TR, update the Category Code 07 field on existing vouchers.  This value is used for 1099 reporting. 

Update Category Code 07 only for vouchers that are included in the 2020 1099 reporting year.  Vouchers from previous 1099 reporting years should not be updated for audit purposes. 

The following options are available: 

Caution:

When running this report, review all the data selection to ensure records are not being changed incorrectly.  Oracle recommends to run this UBE in a test environment first.

Note: Once you start processing 2020 1099 data, you can also use the AP Workfile Adjustment (P04510FP) to revise or add records.  For more information, see document E1: 1099: Overview 1099 Year End Setup and Process (Doc ID 2388282.2), tab AP Method and E1: 1099: Frequently Asked Questions and Troubleshooting Guidelines on 1099 Year End Setup and Process (Doc ID 2388283.2), tab AP Method.

 

3. General Ledger Method

3.1. Data Back-up

It is recommended that a back-up of the following tables is created of the 2019 1099 data and setup for audit purposes: 

 

3.2. Update AAI PXxxxx

PXxxxx AAIs specify the 1099 form (NEC, MISC, DIV and INT) and the box on the form where the amounts for a range of expense object accounts are reported. 

The PXxxxx AAI consists of six characters:

Keep the following guidelines in mind when setting up or changing the PXxxxx AAI: 

3.2.1. Add New AAI PXxxxx

Set up the following new AAIs for 1099 NEC reporting: 

These new AAIs represent what was previously reported on the 1099 MISC form– box A7.  To determine the account range, review last year’s setup for AAI PXA7xx. 

3.2.2. Update Existing AAIs PXAxxx

Update existing PXAxxx AAIs for the boxes that have been modified on the 2020 1099 MISC form. 

After these AAIs have been modified, review all associated account ranges and make the necessary corrections.

 

For example:

 

Note: the highlighted boxes are two examples.  For all changes, see the Overview section in this document. 

 

3.2.3. Delete Existing AAI PXABxx

Delete the existing AAIs for PXABxx as it is no longer used.  

 

3.3. Update Voucher Expense Accounts

It may be necessary to reclassify the voucher expense accounts based on the new PXAxxx AAI setup:

Note: Once you start processing 2020 1099 data, you can also use the AP Workfile Adjustment (P04510FP) or the Enter Payment Adjustments (P04510) to revise or add records.  For more information, see document E1: 1099: Overview 1099 Year End Setup and Process (Doc ID 2388282.2), tab GL Method and E1: 1099: Frequently Asked Questions and Troubleshooting Guidelines on 1099 Year End Setup and Process (Doc ID 2388283.2), tab GL Method.

 

4. Resources

 

Actions

 

Contacts

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In this Document
Details
 1. Overview
 2. Accounts Payable Method
 2.1. Data Back-up
 2.2. Update UDC Tables 01/07 and 04/TR
 2.2.1. Add New Values to UDC Tables 01/07 and 04/TR
 2.2.2. Update Existing Values in UDC Tables 01/07 and 04/TR
 2.2.3. Delete Existing Value in UDC Tables 01/07 and 04/TR
 2.3. Update Supplier Category Code 07
 2.4 Update Voucher Category Code 07
 3. General Ledger Method
 3.1. Data Back-up
 3.2. Update AAI PXxxxx
 3.2.1. Add New AAI PXxxxx
 3.2.2. Update Existing AAIs PXAxxx
 3.2.3. Delete Existing AAI PXABxx
 3.3. Update Voucher Expense Accounts
 4. Resources
Actions
Contacts
References

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