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Glenn Hegar  ·  Texas Comptroller of Public Accounts

USAS Procedures for 1099 Reporting for Calendar Year 2018

Issued: May 12, 2004
Updated: Nov. 2, 2018 – View Changes

FPP E.001

Overview

Applicable to

State agencies and institutions of higher education

Summary

Agencies and institutions often pay individuals who are not their employees for services rendered, and sometimes pay interest to individuals. If your agency or institution has paid a non-corporate payee a total of $600 or more for services or interest during a calendar year, you must report the payment(s) to the Internal Revenue Service (IRS) on a Form 1099-Miscellaneous (MISC) or Form 1099-Interest Income (INT) and send Form 1099 Copy B to the payee. Generally, payments to corporations are not reportable.

Exception: Legal and medical services are reportable to the IRS for corporations. USAS will force 1099 Indicator A (Attorney Fees) or 6 (Medical Services) when a payment is made to a payee with ownership type C (Corporation), O (Out of State Corporation) or T (Texas Corporation) AND the comptroller object code used to make the payment has a default 1099 indicator A or 6 on the USAS D1Ø Profile (comptroller object profile). (See Instructions for Form 1099-MISC PDF regarding payments to corporations for legal and medical services.)

For reportable interest payments see Instructions for Form 1099-INT PDF

Payments made with a credit card or payment card and certain other types of payments, including third-party network transactions, must be reported on Form 1099-K by the payment settlement entity (Citibank N.A.) under section 6050W and are not subject to reporting on Form 1099-MISC; see exceptions on the Instructions for Form 1099-MISC.

State of Texas agencies and institutions of higher education are not required to issue Form 1099-MISC for payments made with a credit card. It is Citibank N.A.’s responsibility to report credit card payments via Form 1099-K.

To assist agencies and institutions with filing 1099s for calendar year (CY) 2018, the Uniform Statewide Accounting System (USAS) captures 1099-related data and by request generates the following reports:

  • DAFR7940
    • 1099 verification reports to help agencies analyze 1099 data prior to requesting the DAFR7950
  • DAFR7950 – agencies choose from one of the following filing formats:
    • 1099 data file – agencies must print hard copies to send to vendor
    • Hard copy forms with the IRS Reportable Data File (IRSRDF)

Important for CY 2018 1099 reporting:

  • Agencies must file with the IRS by Jan. 31, 2019, if reporting in Box 7 on the 1099‑MISC
  • DAFR7950s can be requested any business day beginning Jan. 2–30, 2019
  • USAS-generated 1099 forms are addressed to the payee’s mail code based on the last 1099-eligible payment made to that payee by the paying agency

Note: Agencies can look up the mail code used to generate a 1099 form in the Texas Identification Number System (TINS). For instructions, see 1099 MC Lookup in the Payee Mail Code Information (PYADDR) section TexPayment Resource.

Legend

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Changes to this document
11/02/2018 Updated dates for new year, edited for clarity and added additional instruction for TCC setup
11/03/2017 Updated dates for new year and edited for clarity
11/04/2016 Updated dates for new year and added new IRS reporting deadline
11/13/2015 Updated dates for CY 15; added CAPPS information
Glenn Hegar
Texas Comptroller of Public Accounts
Questions? Contact statewide.accounting@cpa.texas.gov
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