USAS Procedures for 1099 Reporting for Calendar Year 2023
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 agency’s requirements. In addition, you still have the option to internally capture 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 2023, 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 profile determines if the transaction code being used requires a 1099 indicator on transaction entry. The valid values of the 28A are:
| N | 1099 indicator is not allowed to be present on the accounting transaction regardless of whether the data element is coded on input or inferred from a system table. |
|---|---|
| R | 1099 indicator is required on the transaction but may either be coded on input or inferred based on one of the other data elements recorded on input. |
| I | 1099 indicator is required on the transaction and must be coded on input; it cannot be inferred. |
| Blank | Comptroller object dependent (refer to the D10 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 (D10) 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 | Payer made direct sales of $5,000 or more of consumer products to a buyer (recipient) for resale (Box 7). |
| 8 | Substitute payments in lieu of dividends or interest (Box 8). |
| 9 | Crop insurance proceeds (Box 9). |
| A | Attorney’s fees in connection with legal services (Box 10). |
| N | Not reportable. |
Note: If a payment to an attorney for legal services is $600 or more and you can 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 10. (These payments are coded with an A in USAS and reported to Box 10 on the 1099-MISC form.)
Comptroller Object Profile (D10) for 1099-NEC
The valid 1099-NEC indicator with box limits for 1099-NEC is:
| B | Nonemployee Compensation (Box 1). |
|---|
Comptroller Object Profile (D10) for 1099-INT
The valid 1099-INT indicator with box limits for 1099-INT is:
| I | Interest Income (Box 1). |
|---|