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Oracle Fusion 1099/Withholding Tax Setup,

Invoice Processing and Reporting

Detailed Business Process: 1099 system setup, vendor creation, invoice process and reporting
Product: Payables
Applications Release: Fusion r8d01
Author: Cecilia Hibbard
Creation Date: 10/02/2014
Last Updated: 10/02/2014
Document Version: 1.0
Status: (DRAFT, IN REVIEW, APPROVED)
Table of Contents

Gotchas .............................................................................................................................................................1
System Setup ...................................................................................................................................................1
Create 1099 Vendor..........................................................................................................................................5
Withholding Invoice Processing .....................................................................................................................6
Run 1099 Misc. Report.....................................................................................................................................9
1099 Delivered Reports ...................................................................................................................................11
Sample Reports ................................................................................................................................................12

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Gotchas

Make sure there are transactions in the system for the 1099 vendor you setup

Make sure the total payment amount is more than $600 for selected vendor on selected 1099 calendar
year. The current minimum 1099 reporting amount is $600 for selected calendar year.

Make sure to select the appropriate Federal Income Tax type, e.g. MISC1-Rent, MISC2-Royalties, and
MISC3-Other Income. Do not select MISC9 or you will not get results from your 1099 MISC report,
as box 9 on the 1099 form is not numerical based.

System Setup

Summary

Before creating an invoice for a 1099 vendor, it is necessary to enable the 1099 function within Fusion Applications.
This is a step by step guide on how to enable the withholding feature within Fusion Applications.

Setup

1. Navigate to your demo environment and click on the launch demo link
2. Click on apps login link
3. Login as fin_impl/weekly password
4. Open Navigator and select Setup and Maintenance under tools
5. Under Implementation Projects tab, select FIN Implementation Project

6. Search Manage Tax Reporting and withholding Tax under Task and click on the hyperlink

7. Highlight Manage Tax Reporting and Withholding Tax Options and click on Go to Task

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8. Enter the following fields

9. Click on Save and Close


10. Click on Done
11. Edit Withholding Tax Group
a. Under All Tasks tab, enter Manage Withholding Groups under name field and click
on search
b. Highlight your search result and Go to Task

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c. At this point, you can add or edit different withholding groups, such as 1099 or CA
Withholding.

Note: Withholding Group is the Payee for the withholding payments and applies a tax rate via the Tax
Code (unless you have a vendor specific rate see step 13).

12. Edit Withholding Tax Code and tie it to the withholding tax group from step 9.
a. Open Navigator and select Setup and Maintenance under tools
b. Under All Tasks tab, enter Manage Tax Code under name field and click on search
c. Highlight your search result and click on Go to Task

d. Click on 1099 hyperlink

Note: Withholding tax codes can have multiple rates, effective date ranges, tax amount limits, and taxable
amount limits. You must associate a supplier with a type of Tax Authority to a withholding tax code so you
can create withholding invoices to pay taxes you withheld from your suppliers.

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e. Rate Structure: Each tax code has a rate structure to specify amount or rate controls. To
define rates for the withholding tax code, you must select a rate type. Oracle Fusion Payables
uses the rate type of Standard.
f. To use withholding tax codes, assign them to one or more withholding tax groups. When you
define a withholding tax code, you can enable the Create withholding tax group option to
automatically create a group for that tax code. To handle rate exceptions, define withholding
tax certificates for a withholding tax code. You can create other Rate Structures to suit your
needs, such as Flat Rate, Period Limit and Amount Ranges.
g. Click on save and Close
h. Click on Done

13. Manage Withholding Certificates:


a. Under All Tasks tab, enter Manage withholding certificates under name field and click
on search
b. Highlight your search result and click on Go to Task

c. Search for the supplier you would like to apply the tax certificate to. In this case, we will
choose Lee Supplies
Note: In this scenario, we are applying a Certificate to specify a withholding tax code rate for all
invoices for a supplier site. You can also define a withholding tax code rate exception for a single invoice.
Under Tax Rate: 10 indicates 10% withholding tax, 20 indicates 20% and so on.
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d. Click on Save and Close when you are done.

Create 1099 Vendor

Summary

In order to mark a vendor as 1099 vendor and have the withholding tax calculated correctly, there are a
few fields you need to setup within the vendor master. This section provides you the guide on how to
mark a vendor as 1099 vendor.

Setup

1. Navigate to your demo environment and click on the launch demo link
2. Click on apps login link
3. Login as Casey.Brown/weekly password

4. Click on Navigator, under Procurement, select Suppliers


5. Search for the supplier you would like to mark as a 1099 supplier. In this case, we are choosing
Lee Supplies
6. Select Sites tab under supplier master and click on the Site hyperlink

7. Under General tab, ensure Income tax reporting site is checked

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8. Under Site Assignment tab, ensure Use Withholding Tax box is checked and Withholding Tax Group is
selected.

9. Click on Save and Close.


10. Go back to Profile tab. Under Profile Details region, enter the fields as the following screenshot. Select
the appropriate Federal Income Tax Type from the drop down menu. We are selecting MISC3 in this
scenario.

11. Click on Save and Close

Withholding Invoice Processing

Storyboard

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In this scenario, we will be log in as a payables specialist, create an invoice for Lee Supplies. Lee
Supplies is a 1099 vendor and subject to 1099 reporting at the end of the year. IRS however demands a
10% tax levy on Lee Supplies. Vision Corp will need to pay the 10% tax withholding to IRS for every
invoice they pay to Lee Supplies and report the 100% invoice amount to IRS as 1099 income at the end
of the year.

1. Navigate to your demo environment and click on Launch Demo link


2. Click on Apps Login link
3. Login as Matthew.Schnieder/weekly password or any user who has access to payables invoice
entry
4. Go to Navigator and click on Invoices under Payables
5. Click on Create Invoice from Task Pane
6. Enter required fields on manual invoice.
7. Click on Withholding hyperlink under invoice lines. You will see Withholding Tax Group is
selected.

8. Click on Invoice Actions dropdown menu and click Validate.


Notice that the withholding tax is automatically deducted from this invoice once you validate the
invoice.
9. Click on Save and Close

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10. Now lets review the invoice automated created for IRS for the $109.50 withholding
amount
a. Click on Manage Invoice on Task Pane
b. Search under the following criteria:
i. Supplier or Party: Internal Revenue Service
ii. Invoice Date: Todays Date
iii. Click on search
c. Under search result, click on the invoice hyperlink
d. Here you are reviewing the payables invoice created for IRS.

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Run 1099 Misc. Report

1. Click on Navigator and select Scheduled Processes under Tools


2. Click on Schedule New Process
3. Search for US 1099 Report
4. Enter the required fields

5. Click on Advanced
6. Under the Output tab, click on the green + sign and select the following parameters:
a. Name: APXTRF99 Document1
b. Layout: U.S. 1099 Federal Forms Layout Report
c. Format: PDF
d. Click on Submit

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7. Here is a copy of the 1099 Misc. report you have just created

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1099 Delivered Reports

List of 1099 Delivered Reports Descriptions


Data model is used for the US 1099 Report. The data model
extracts United States 1099 related transaction information and
includes a flexfield filter based on the balancing segment
account. The data is grouped by supplier name, tax reporting
name, organization type, country, address line, city, province,
US 1099 Data Model state, and postal code.
Data model is used for the US 1099 Electronic Media Report. The
data model extracts United States 1099 related transaction data
and includes a flexfield filter based on the balancing segment
account. The data is grouped by supplier name, tax reporting
US 1099 Electronic Media Data name, organization type, country, address line, city, province,
Model state, and postal code.
Generates summarized United States 1099 information in
electronic format, as required by the United States Internal
US 1099 Electronic Media Report Revenue Service.
US 1099 Forms - Comma Delimited Reports the total United States 1099 miscellaneous tax type
Format payments for 1099 suppliers in a comma delimited format.
Data model is used for the US 1099 Forms - Comma Delimited
Format Report. The data model extracts United States 1099
related transaction information and includes a flexfield filter
based on the balancing segment account. The data is grouped by
US 1099 Forms - Comma Delimited supplier name, tax reporting name, organization type, country,
Format Data Model address line, city, province, state, and postal code.
Data model is used for the US 1099 Invoice Exceptions Report.
The data model extracts paid invoice distributions with
inaccurate or missing United States 1099 income tax information
and includes a flexfield filter based on the balancing segment
US 1099 Invoice Exceptions Data value of the account. The data is grouped by supplier name,
Model invoice number, invoice date, invoice amount, and invoice line.
Lists paid invoice distributions with inaccurate or missing United
US 1099 Invoice Exceptions Report States 1099 income tax information.
Data model is used for the US 1099 Payments Report. The data
model extracts payments made to United States 1099 reportable
suppliers and includes a flexfield filter based on the balancing
segment value of the account. The data is grouped by supplier,
US 1099 Payments Data Model income tax region, and income tax type.
US 1099 Payments Report Lists payments made to United States 1099 reportable suppliers.
Reports the total United States 1099 miscellaneous payments for
a particular 1099 supplier and generates 1099 forms for each tax
US 1099 Report reporting entity in an organization.

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Sample Reports

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