This blog content has been updated with 2021 year-end details. Click here to read the latest blog.
Are you prepared to meet upcoming year-end processing deadlines? As 2020 quickly comes to an end, it’s time to set up your EnterpriseOne systems and processes to meet and stay compliant with 1099 and US payroll reporting requirements.
For JD Edwards customers, most of the tasks can be performed using Accounts Payable, HCM (Payroll, Time and Labor) and Address Book systems, as well as applying current ESUs to account for any legislative or regulatory changes that occurred during the year.
ESUs for the 2020 tax year are available for customers running E1 9.0 or 9.1 who have also purchased ACS (Advanced Customer Services) from Oracle.
JDE customers on 9.2 can leverage the Change Assistant tool to determine which ESU to install, as well as install multiple ESUs simultaneously.
Form 1099-NEC (2020): Beginning with the 2020 tax year, the IRS has reintroduced Form 1099-NEC for reporting nonemployee compensation.
This includes all independent contractors or self-employed individuals who previously had their payments reported in box 7 of a 1099-MISC form.
However, payments of $600 or more for rent, prizes and awards, gross proceeds to attorneys, certain medical and health care payments and royalties over $10 should still be reported on Form 1099-MISC.
Form 1099-NEC Filing Deadline: Form 1099-NEC is due to both recipients and the IRS by February 1, 2021, regardless of whether filing electronically or by paper.
Form 1099-MISC (2020): Due to the creation of Form 1099-NEC, IRS has revised Form 1099-MISC and rearranged box numbers for reporting certain income. Changes in the reporting of income and the form’s box numbers are listed below.
- Payer made direct sales of $5,000 or more (checkbox) in box 7.
- Crop insurance proceeds are reported in box 9.
- Gross proceeds to an attorney are reported in box 10.
- Section 409A deferrals are reported in box 12.
- Nonqualified deferred compensation income is reported in box 14.
- Boxes 15, 16, and 17 report state taxes withheld, state identification number, and amount of income earned in the state, respectively.
E-File Threshold: The IRS also modified the threshold for the required electronic filing of most information returns, such as Forms W-2 and 1099. The threshold remains at 250 or more forms filed for the tax year 2020, but drops to 100 forms in tax year 2021, and 10 forms in tax year 2022.
Overview: Year-End Processing Tasks
The 1099 form is an income tax reporting form that has several variations including 1099-DIV (dividends & distributions), 1099-INT (interest income), 1099-MISC (miscellaneous income) and 1099-NEC (nonemployee compensation).
Some of the tasks related to 1099 processing include:
* Decide which method or combination of methods to use (A/P Ledger or G/L method)
* Prepare internal records
- Back up E1 work file data for last year for any future IRS communications related to tax assessment.
- Clear the work files from last year
- Review and update the AAIs
- W9 exception report
- Voucher 1099 info update
- Payroll Module: Apps Release 9.2 Update 5 has a new integrity report that gives payroll professionals increased confidence in their payroll data ahead of filing the W2 forms, especially if manual adjustments or other changes have occurred throughout the year
* Verify Supplier & Company Setup codes (P for individual, N for non-corporate entity)
* Verify all tax identification numbers, legal names
* Take latest 1099 ESUs and deploy into test environment first for testing before pushing it to PD
* Build and review the work files
* Print 1099 Registers and perform any adjustments if required
* Perform 1099 Reporting – Print forms (Pre-printed or BI publisher), Mailing & eFiling
1099 Documentation: https://docs.oracle.com/cd/E64610_01/EOAYP/toc.htm
Employers who have paid wages to and withheld taxes from US-based employees use W-2 and W-3 forms to report to employees, Social Security Administration and IRS. Some of the tasks related to US Payroll year-end processing include:
- Install the appropriate ESU
- Verify the payroll history
- Process rollovers
- Verify employee names & addresses
- Set up deductions, benefits & accruals (DBAs)
- Set up pay types for 1099 processing
- Print audit reports
- Generate electronic filing work files
US Payroll Documentation: https://docs.oracle.com/cd/E64610_01/EOAYU/toc.htm
To avoid penalties, companies should prepare and submit 1099 and W-2 information by these dates. Deadlines for additional forms can be found in the table below.
*Note that companies with more than 250 forms of each type (1099s & W-2s) to file must file online for the 2020 tax year. Also, there are no automatic extensions for 1099s or W-2s for the 2020 tax year.
Smart Help for JD Edwards Year-End Processing
Ready to get started? Whether you need end-to-end or a la carte support with processing 1099s or year-end payroll, Smart Help resources are available to assist whenever needed for as long as needed through CNC, technical & functional support including ESU updates, 1099 print & eFile, configuration, setup and so much more.
Looking for help beyond year-end? Explore CE’s Smart Help Staff Aug+ to tap into more than 160 skills, resources, services & innovations here.
IRS Instructions for Forms 1099-MISC and 1099 NEC: https://www.irs.gov/instructions/i1099msc
Year-End Processing Documentation (Release 9.2): https://docs.oracle.com/cd/E64610_01/nav/yearend.htm
Year-End ESUs (Doc 743162.1): https://support.oracle.com/knowledge/JD%20Edwards%20EnterpriseOne/743162_1.html
Smart Help for JDE Year-End Processing: https://www.circularedge.com/smart-help-1099
Latest 9.2 Capabilities Whitepaper: http://www.circularedge.com/resources/jde-9-2-outline
Tap Into 160+ Available Resources (regardless of existing contracts, terms, etc): https://www.circularedge.com/services/smart-help/smart-help-staff-aug
***Special thanks to Sr Functional Consultant Yogesh Godbole for contributing to the functional content :)