Defining secondary withholding codes

Secondary withholding codes are used to link a general ledger withholding accrual account to an invoice. The account is used to accrue secondary withholding for vendors, such as when you are required to withhold a portion of the invoice payment. This procedure describes the process for identifying the account that will accrue the money you withhold. Define as many codes as you need.

Define secondary withholding

  1. Access Secondary Withholding Codes (AP08.1).
  2. Specify this information:
    Secondary Withholding Code

    Define your secondary withholding codes. Secondary withholding codes represent a general ledger income withholding accrual accounts. These are used to accrue secondary withholding for vendors.

    Status

    Select whether code is active or inactive. To deactivate a withholding code, set this flag to Inactive.

    Company

    Specify or select a valid general ledger company number. Used for posting vendor secondary withholding to general ledger.

    Distribution Account

    Specify or select a valid general ledger accrual accounting unit and account for the secondary withholding code.

    Minimum Payment Amount

    Specify a minimum payment amount before secondary withholding applies.

    Withholding Type

    Select whether withholding for Federal, State, or Other taxes.

  3. Select one or more withholding rates with associated effective dates.
    Effective Date

    Specify a date this withholding becomes effective.

    Withholding Rate

    Specify the rate of withholding (percentage).

  4. Select the Add form action.
  5. Access AP Company (AP00.4) and change the Secondary Withholding flag to Yes. to enable secondary withholding. The secondary withholding code(s) specified here is (are) the default for all vendors and all invoices exceeding the minimum payment amount (defined on the secondary withholding code).
  6. To mark a vendor as exempt from secondary withholding or to assign a different secondary withholding code, access Vendor (AP10.1), click the 1099 Info button to access 1099 Tax Identification Information (AP14.5) and set the Secondary Withholding Exempt field to Yes (Y=Exempt, No=Not exempt).

Related reports and inquiries

To Run
Print a report of all secondary withholdings for a vendor Secondary Withholding Report (AP246)