Enter Supplier Income Tax Information
Explanation
Use this activity to designate a supplier as subject to tax reporting and/or
withholding. In the United States, this is known as Form 1099 income tax reporting and
withholding. You can also define valid supplier income types, which identify the
categories of income each registered invoice line from the supplier represents.
If necessary (i.e. check box Supplement Report Codes to Tax Withholding Lines in Company/Invoice
is cleared), you must also specify the states where tax withholding at state level applies
for the supplier.
Prerequisites
This activity requires that:
- A supplier exist.
- The association number be specified in the header portion of the
Supplier
window, or the tax ID number be specified on the Supplier/Invoice/General
tab.
- General supplier information be entered on the
Supplier/General tab.
- Supplier address information be entered on the
Supplier/Address tab.
Address, city, state, zip code and phone number must be entered. It is also required that
check boxes for Address Defaults and Method Default are marked
when saving the phone number as communication method.
- The supplier group be defined in the Supplier Groups
window.
- The currency be defined in ISO Code
Usage/Currency.
- Payment terms be defined in the Payment Terms
window.
- One or more supplier income types be defined in the
Income Types
window.
For state income tax reporting and withholding, the Supplement Report Codes
to Tax Withholding Lines check box must be selected on the
Company/Invoice tab.
Also, tax report codes with the State Tax Withhold tax function must have been defined in
the Report Codes for Tax Lines, Withholding
window.
System Effects
As a result of this activity, supplier income types can be registered for invoice
lines, which enables income taxes to be reported and/or withheld as required by law.
Window
Tax
Withholding/Reporting
Related Window Descriptions
Tax Withholding/Reporting
Procedure
To perform this activity, follow these steps:
- In the Tax Withholding/Reporting List, specify whether the supplier is subject to tax
reporting only or to tax withholding and reporting.
- If the supplier is exempt from tax withholding, select the Tax Exempt check box. Also,
enter the beginning and ending dates of the period during which the exemption is valid.
- If the IRS has sent a second notice during the past three calendar years indicating that
the taxpayer's taxpayer identification number (TIN) is missing or incorrect, select the
2nd TIN Notification check box.
- Click the
Supplier Income Type tab.
- Create a new record.
- In the Supplier Income Type ID field, select a supplier income type from the List of
Values. Values appear automatically in the Description and Threshold Amount in Acc Curr
fields.
- If you want to specify a threshold amount specifically for this supplier, enter a
numeric value in the Supplier Threshold Amount in Acc Curr field. This value
overrides the global threshold amount defined in the
Income Types window.
- If you want this supplier income type to appear by default when an invoice line is
entered, select the Income Type ID as Default check box.
- If the supplier is subject to income tax withholding at the state level, click the
Supplier
State Tax Info tab. This tab is visible only if the Supplement
Report Codes to Tax Withholding Lines check box is selected on the
Company/Invoice tab.
In the Report Code field, select a supplier state report code from the List of Values.
Values appear automatically in the Description and Country Code fields. Select the state
for which you want to report and/or withholding taxes using this report code. You can
specify up to two states using report codes 16A and 16B.
- Save your changes.