If you do business with vendors that are subject to United States 1099 tax, you must track the amount that you pay to each vendor and report that information to the U.S. tax authorities at the end of the calendar year. The vendors are typically individuals who are not employees and who provide services to your organization. You also must send a statement to each 1099 vendor that you do business with, informing them of the amount that you are reporting to the tax authorities.

For each vendor that you have set up to be a 1099 vendor, the amounts are tracked from within Microsoft Dynamics AX throughout the year. If you set up a 1099 vendor during the calendar year after you have already processed transactions for that vendor, you can update the previous transactions to be 1099 transactions.

In the Vendors form ( Accounts payable> Vendors), select a vendor and click Functions> Update 1099to update transactions. For more information, see (USA) Set up vendors for 1099 reporting.

We recommend that you review IRS rule changes for the applicable tax year before you set up and process 1099 statements.

When you are ready to process 1099 statements, use the Vendor settlement for 1099s form ( Accounts payable> Periodic> Vendor settlement for 1099s) to do so. See Tax 1099 summary (form)for more information.