1099 Tax Codes

Historical information is accumulated by 1099 tax code.   When you enter an invoice, debit memo, credit memo, or payment in a 1099 environment, you indicate what 1099 code is used for that item.  The default 1099 tax code for each vendor is defined on the Vendor Master File.  Depending on the code you enter, the information on the item will be classified into a group corresponding to the 1099 tax code.  The 1099 tax codes are defined on Reference File category 231 with a description.  You can define as many different 1099 codes as you wish.  One code is pre-defined by the system:

00 - Non-taxable.  The item is not subject to 1099 taxes.  However, the total amount of items with this tax code is accumulated on the vendor history file and printed on the 1099 report.

For other tax codes, the amount of the item is added to the vendor's total amount subject to 1099.  However, the corresponding tax is not automatically withheld from the vendor.