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Glenn Hegar  ·  Texas Comptroller of Public Accounts

FPP E.001

USAS Criteria for 1099 Information Reporting

Overview

Certain payments are reportable to the IRS on Form 1099-MISC. USAS generates the reports, forms and the IRS reportable data file.

You have the option of overriding USAS defaults to meet your particular requirements. In addition, you still have the option of internally capturing 1099-related data. Agencies and institutions of higher education that capture their own data have the option of suppressing the error messages related to 1099 data. See warning messages WR1 and ER1 under USAS 1099 Overrides, Warnings and Fatal Errors. However, the default 1099 indicators will appear in the agencies’ transactions.

A transaction’s reportability is determined by the value of the 1099 indicator either entered by the agency and institution or inferred from the comptroller object. Three criteria in USAS are used to determine reportability:

  • Transaction Code Decision Profile (28A)
  • Texas Identification Number System (TINS) Ownership Code
  • Comptroller Object Profile (D10)

Note: If an employee died during calendar year 2017, agencies and institutions are responsible for reporting on Form 1099-MISC the accrued wages, vacation pay and other compensation paid to the estate or beneficiary of the deceased employee. Much of this payment information is not captured in USAS but can be found in your agency’s or institution’s payroll records.

Transaction Code Decision Profile (28A)

This decision profile determines if the transaction is 1099 reportable. The valid values of the 28A are:

N Transaction is not 1099-reportable
R Transaction is 1099-reportable, either entered or inferred
I 1099 indicator must be entered, cannot be inferred
Blank Comptroller object dependent (Refer to the D1Ø Comptroller Object Profile screen)

TINS Ownership Code

Ownership codes subject to reportability are:

E State Employee
I Individual Recipient
P Partnership
S Sole Ownership
A Professional Association
L Texas Limited Partnership
F* Financial Institution
R* Foreign Corporation
N Other (This code may require your agency or institution to do additional research to identify a specific ownership type.)

* Note: Depending on the type of agency business, we recommend the agency review transactions with TIN Ownership Types F and R to ensure proper reportability.

Comptroller Object Profile (D1Ø) for 1099-MISC

The valid 1099 indicators with box limits for 1099-MISC are:

1 Rents (Box 1)
2 Royalties (Box 2)
3 Other income (Box 3)

Note: If a payment to an attorney for legal services is $600 or more and you are not able to determine the exact dollar amount being paid to the claimant and the claimant’s attorney, the payment (gross proceeds) is considered reportable to the 1099-MISC Box 3.

4 Federal income tax withheld (Box 4)
5 Fishing boat proceeds (Box 5 – any amount)
6 Medical and health care payments (Box 6)
7 Non-employee compensation (Box 7)
8 Substitute payments in lieu of dividends or interest (Box 8)
9 Payer made direct sales of $5,000 or more of consumer products to a buyer (recipient) for resale (Box 9)
0 Crop insurance proceeds (Box 10)
C Reportable, cannot be inferred
N Not reportable
A Attorney’s fees in connection with legal services (Box 14)

Note: If a payment to an attorney for legal services is $600 or more and you are able to determine the exact dollar amount being paid to the attorney and the parties involved (claimants), the payment is considered reportable to the 1099-MISC Box 14. (These payments are coded with an A in USAS and reported to Box 14 on the 1099-MISC form.)

Comptroller Object Profile (D1Ø) for 1099-INT

The valid 1099-INT indicator with box limits for 1099-INT is:

I Interest Income (Box 1)
Glenn Hegar
Texas Comptroller of Public Accounts
Questions? Contact statewide.accounting@cpa.texas.gov
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