Processing corrected returns

After you process the original reportable income and submit the return to the IRS, you can make corrections in the original 1099 forms and tapes and process the corrected returns.

If an information return is successfully processed by the IRS and you identify an error with the file, then you must generate a corrected return.

You can process two types of correction returns in the latest update of the 1099 Tape Creation (AP146) form:
  • One-transaction correction applies to:
    • Incorrect amount codes in the issuer A record
    • Incorrect payment amounts in the Payee B record
  • Two-transaction correction applies to:
    • No payee's TIN
    • Incorrect payee's TIN
    • Incorrect payee's name
    • Incorrect type of return indicators
The correction returns produces two types of outputs:
  • Print (incform) output with blank amount
  • Tape output

To process corrected returns, follow these steps:

  1. Generate one-transaction corrections:
    1. To show the correct payment amount, update the payment records for specific vendors.
    2. On the 1099 Tape Creation (AP146) form, select G in the Tape Type or Print Type fields.
    3. Select the vendor with one-transaction corrections.
    4. Click Submit.
    5. After you print the form, select the Corrected check box located at the top of the printed form.
  2. Generate two-transaction corrections:
    1. Identify vendors that must be corrected.
    2. On the 1099 Tape Creation (AP146) form, select Z in the Tape Type or Print Type fields.
    3. Select the vendor with two-transaction corrections.
    4. Click Submit.
      Note: If you are generating two-transaction correction returns, then you must do this step before you make any corrections to the original data. In this step, a printed form with blank amounts or a tape file with zero amount and corrected return G in field position 6 of the B records is generated.
    5. After you print the form, select the Corrected check box located at the top of the printed form.
    6. Specify the correct payee TIN or payee name.
    7. On the 1099 Tape Creation (AP146) form, select C in the Tape Type or Print Type fields.
    8. Select the vendor with two-transaction corrections.
      Note: You must select the same vendor to which you make the corrected return Z.
    9. Click Submit.
      Note: A printed form with the correct payee information or a tape file with the correct payee information and corrected return C in field position 6 of the B records is generated.