SAP Functional, Basis Administration and ABAP Programming Reference Books
Using 1099 MISC Reporting

In order to use 1099 MISC reporting is something that needs to be configured or set up in the vendor master records? I am trying to run the report and I don't get anything. 

To flag a vendor in SAP as a 1099 vendor, two fields need to be populated. 

1. On the Control screen of the vendor master, populate either "Tax Code 1" field with his social security number if his social security number is his tax id. or "Tax Code 2" field with his corporate tax id. if he has been issued a corporate tax id. Input either of the two in their correct format i.e. social security as xxx-xx-xxxx or corporate id as xx-xxxxxxx. 

2. On the Accounting Info. screen, populate the " code" field under the "Withholding Tax" box with the value "07" if it is a US vendor or "42" if it is a foreign vendor. 

These are the two fields that specify a vendor as being a 1099 vendor. 

Any posts done before this changes were implemented will not show on 1099. 

You will need to run program RFWT0020 to flag 1099 items retroactively. 

...and/or you can change the "Document Change rules" for BSEG-QSSHB and BESG-QSSKZ for account type "K" so that you can change the Withholding tax code after the line item has been cleared (i.e. after entering the required information in the vendor master record as the user above has recommended) (Refer to OSS Note: 363650). 

But if you use MIRO to post invoices, you might want to look at Note 482245 too... 

In SAP v40b, the new 1099 report is RFW1099M. It is a neat report since it merges all the three reports that are listed in the AP info system under the withholding tax. 

In my system the witholding tax code field shows only one option Y (back-Up Witholding) instead of 7 and 42. ALso it gives me message "Extended witholding tax functionality is not active". 
Do I miss some settings on the global level, or I just need to update the vendor master records? 

We are on 40b. If you do not have any code, you can create them in Tcode OBC7. But I have seen standard code on this screen provided by SAP. Pl. note that you may only be able to see the code on the vendor master if you are in change mode. For some unknown reason, when you are in display mode, SAP tells you that there are no codes. 

The first report in 4.0b gives all the correct 1099 vendor numbers as well as the error list of incorrect vendor numbers. 

The second report gives all the 1099 line items by vendor posted during the year. 

The third report lets you print the actual form for IRS/vendors and also lets you send the file electronically to IRS. 

You mentioned running RFWT0020 - what exactly does this do? I have the same problem that our A/P staff did not update some vendors with the appropriate 1099 data. Now we are getting the data needed - I usually have someone in our IT dept. create a spool manually for those vendors. Will the program above update our vendors' transactions with 1099 info (assuming the vendor master has been updated)? 

Yes. This report flags all the past vendor line items as 1099 items retroactively. FYI, we're on 4.0b. One thing that is peculiar about this report is that on the selection screen, you need to put 00000000 to zzzzzzzzz in the vendor number field otherwise it does not flag any records (at least that's what it did with our records). 

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Best regards,
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