Supplier tax deduction or withholding tax
Requirement
In the US, certain payments are recorded, and the information is submitted to the Internal Revenue Service (IRS). The paid supplier also receives a copy of the 1099 form that details the payments that have been received as miscellaneous income (1009-MISC) and non-employee compensation (1099-NEC).
M3 solution
There are four possible methods for processing and controlling supplier tax deductions, accounting and reporting that can be assigned to each standard service code. The Alt3 method is used for this purpose, where supplier tax deductions are recorded when the invoice is entered, but are only accounted for when the supplier payment is recorded.
The creation of supplier tax report can be retrieved in TXT format in accordance with the local requirements.
For this country, these FBMs have been developed and designed specifically for sending supplier tax transaction data from M3 to the tax authorities:
- M3FBM_US_Out_SupplierTaxReport_1099_NEC_2021
- M3FBM_US_Out_SupplierTaxReport_1099_MISC_2021
For the ION configuration of this message, see the Infor M3 CoreAdministration Guide.
Configuration guidelines
| Program ID | Program name | Description or comment |
|---|---|---|
| MNS100 | Company. Connect Division | See Configuration guidelines for 'Company. Connect Division' (MNS100). |
| CRS620 | Supplier. Open |
Define the following information for supplier: Name Specify a valid name. Country Set to State Specify a valid value. |
| CRS622 | Supplier. Connect Address | See "Configuration guidelines for 'Supplier. Connect Address’ (CRS622)". |
| CRS624 | Supplier. Define Purchase & Financial |
Specify this information: Service code Specify the default value. See the settings for (CRS063). Tax ID no suppl Specify a value. Activity Code Set to FTC or leave empty. Tax withholding method Set to 3-Tax at inv/bs at pmt. |
| CRS610/E | Customer. Open | See "Configuration guidelines for 'Customer. Open' (CRS610)". |
| APS905 | Settings - Accounts Payable | Set Withholding tax using flexible serv codes to 0-Not used. |
| APS035 | Settings - Supplier Tax | Set Tax method - Report method to 2-For USA - one supplier per page or 3-For USA - Two suppliers per page. |
| CRS395 | Accounting Rule. Set | Configure accounting rules for accounting type 396. |
| TXS035 | Taxation Reporting. Open Report Fields | See Configuration guidelines for 'Taxation Reporting. Open Report Fields' (TXS035). |
| CRS618 | Contact Person. Open |
Set Status field to 20-Definite. See "Configuration guidelines for 'Contact Person. Open' (CRS618)". |
| CRS046 | States per Country. Open | Specify the State and
Description
fields. Set Country to US. |
| CRS063 | Supplier Service Code. Open |
For the applicable suppliers, define service codes for the calculation of the withholding tax. It is recommended to specify this information: Service code Specify a value. Name Specify the purpose of the amounts paid. Withholding pct Specify a value. Box identity See "Configuration guidelines for ‘Supplier Service Code. Open’ (CRS063)". |
| APS130 | Supplier Payment Proposal. Open | Create a proposal, review and confirm it. |
| APS425 | Supplier Tax Report. Display Invoices | |
| APS430 | Supplier Tax Report. Create Proposal |
Configuration guidelines for 'Supplier Service Code. Open' (CRS063)
These guidelines describe the configuration that is required to specify the Box ID for supplier service codes for the 1099-MISC and 1099-NEC format . In 'Supplier Service Code. Open' (CRS063), box IDs are specified to retrieve the applicable amounts paid in the report proposal.
1099-MISC format
| Box ID | Box header |
|---|---|
| 01 | Rents |
| 02 | Royalties |
| 03 | Other Income |
| 05 | Fishing Boat |
| 06 | Medical and health care |
| 08 | Substitute payments |
| 10 | Crop insurance |
| 13 | Excess golden parachute |
| 14 | Gross proceeds |
1099-NEC format
| Box ID | Box header |
|---|---|
| 07 | Nonemployee Compensation |
Configuration guidelines for 'Taxation Reporting. Open Report Fields' (TXS035)
Additional information can be defined in ‘Taxation Reporting. Open Report Fields’ (TXS035). Ensure that this information is defined using transaction type 6 - for Supplier tax reports.
| M3 field | M3 field ID | Description or comment |
|---|---|---|
| Additional field in report header | ESAF | See the next table for field numbers used by the specific report. |
| Base country | BSCD | Set to US. |
| No | Description | Length | Numeric | Field Value or Comment |
|---|---|---|---|---|
| 500 | Contact Person of the Company | 36 | Cleared |
Required Specify a valid Contact ID (CNPE) as defined in (CRS618). |
| 509 | TIN of the company | 9 | Selected |
Required Specify the TIN (Tax identification number) of the company. |
| 511 | TCC of the company | 5 | Cleared |
Required Specify the TCC (Transmitter Control Code) as assigned from the Internal Revenue Service, Technical Services Operation (TSO) |
| 522 | Test indicator | 1 | Selected |
Optional Set to 1 - for a test message otherwise set to 0. |
| 576 | Software contact | 36 | Cleared |
Required Specify a valid 'Contact ID’ (CNPE) as defined in (CRS618). If this is not defined, leave the field blank. |
| 578 | Software company | 10 | Cleared |
Required Specify a valid customer number (CUNO) with the name and address information in (CRS610). |
Configuration guidelines for 'Company. Connect Division' (MNS100)
Information that you specify in (MNS100) is used for the transmitter and payer identification in records T and A of the 1099-MISC and 1099-NEC formats.
| M3 field | M3 field ID | Description or comment |
|---|---|---|
|
Name Address line 1-4 |
CONM COA1-COA4 |
Required The name is used for fields Transmitter name and Company name. The address lines are used for fields Company mailing address and Payer shipping address. |
| City | TOWN |
Required This information is used for fields Company city and Payer city. |
| Postal Code | PONO |
Required This information is used for fields Company zip code and Payer zip code. |
| State | ECAR |
Required This information is used for fields Company state and Payer state. |
| Country | CSCD |
Required The value is expected to be US. |
| Tax declaration number | VRNL |
Required This information is used for the TIN of the Transmitter field if the additional field 509 in (TXS035) is not available. The default value is taken from Tax declaration number. See "Configuration guidelines for 'Taxation Reporting. Open Report Fields' (TXS035). |
Configuration guidelines for 'Supplier. Connect Address' (CRS622)
Information that you specify in (CRS622) is used to identify the payee's address in record B of the 1099-MISC and 1099-NEC formats.
| M3 field | M3 field ID | Description or comment |
|---|---|---|
| Address type | ADTE |
Required Set to either or both 01-Postal address or 02-Street address. |
| Address line 1-4 | ADR1-ADR4 |
Required The address lines are used for fields Payee mailing address. |
| City | TOWN |
Required This information is used for fields Payee city. |
| State | ECAR |
Required This information is used for fields Payee state. |
| Postal Code | PONO |
Required This information is used for fields Payee zip code. |
Configuration guidelines for 'Customer. Open' (CRS610)
Information that you specify in (CRS610) is used for the software vendor identification in record T of the 1099-MISC and 1099-NEC formats. Each M3 field default value is taken from the additional field 578 in (TXS035). See "Configuration guidelines for 'Taxation Reporting. Open Report Fields' (TXS035)".
| M3 field | M3 field ID | Description or comment |
|---|---|---|
| Customer type | CUTP |
Required Set to 7-Internal customer. |
|
Name Address line 1-4 |
ADTE ADR1-ADR4 |
Required The name is used for field Vendor name. The address lines are used for fields Vendor mailing address. |
| City | TOWN |
Required This information is used for fields Vendor city. |
| State | ECAR |
Required This information is used for fields Vendor state. |
| Postal Code | PONO |
Required This information is used for fields Vendor zip code. |
Configuration guidelines for 'Contact Person. Open' (CRS618)
Information that you specify in (CRS618) is used for the company and vendor contact information in record T of the 1099-MISC and 1099-NEC formats. The default value for each M3 field is taken from the additional field 500 or 576 in (TXS035). See "Configuration guidelines for 'Taxation Reporting. Open Report Fields' (TXS035)".
| M3 field | M3 field ID | Description or comment |
|---|---|---|
|
First Name Last Name |
NAMF NAMS
|
Required The name is used for fields Vendor contact and Contact name. |
| Telephone no 1 | PHNO |
Required This information is used for fields Contact Telephone Number and Extension and Vendor contact telephone number and extension. |
| Email address | EMAL |
Required This information is used for fields Contact E-mail Address. |
Further configuration guidelines to report electronically
| Program ID | Program name | Description or comment |
|---|---|---|
| CRS116 | Document Media. Open |
Specify this information: Name Specify MBMEVENT Interface Specify EVENTHUB. Media category Specify 06-MBM initiator. Host value Specify 1-Installation name. |
| CRS027 | Standard Document. Open | To add document number 507-Supplier tax reporting, select . |
| CRS929 | M3 Document. Connect Media | Add media MBMEVENT for document number 507-Supplier tax reporting. |
| CRS945 | Std Document. Connect Media Ctrl Object | Create a record for document number 507-Supplier tax reporting attached to the base country US. |
| CRS949 | Doc Media Control Object. Connect Media |
To open this program, from 'Std Document. Connect Media Ctrl Object' (CRS945), select . Create a connection to media MBMEVENT. Specify this information: Set Media to MBMEVENT. Set Service ID to *JOB. Set the Receiver reference data 3 field to one or both of these values:
Note: The 1099-MISC and 1099-NEC formats
are not dependent on each other to generate an
output.
Note: For standard media management, the
settings in the Media Control Selections section in 'Output
Service Selection. Open' (MNS204) must be set to 3 for the
printout (APS434PF). Thus, information is retrieved in
(CRS949).
|