Generate a 1099 for someone in the Employee or Other Names list
PrintOverview
QuickBooks can only process Form 1099 for a person or company set up as a vendor or an independent contractor in the Vendors list.
If you need to process Form 1099 in QuickBooks for someone who has been added to the Employees list or to the Other Names list, you will need to move the person to the Vendors list. This article will provide you instructions on how to perform this process.
Assumptions
The person you are processing Form 1099 for qualifies as an independent contractor. See Employer's Tax Guide (Circular E, Pub 15) for more information.
Expected Outcome
You will be able to process Form 1099 in QuickBooks for the person.
Details
Instructions on how to process Form 1099 will differ depending on where the person is listed in QuickBooks: Employees list or Other Names list.
To generate 1099 for someone in the Other Names list:
Choose Lists > Other Names List.
Right-click the person's name and select Edit Other Name.
Edit the name as necessary and then click Change Type.
In the Select Name Type field, select Vendor and click OK. When the Change Type warning appears, click OK.
Choose Vendors > Vendor Center.
Double-click the appropriate name to edit it. Ensure there is a complete address in the record.
Click the Additional Info tab and select Vendor eligible for 1099.
Enter a Tax ID Number (either a Social Security Number or Federal Employer Identification number).
Click OK.
To process 1099 for someone in the employee list:
You will need to process W-2 forms if:
- The person is listed in the Employees list and you have processed paychecks for the person. In this case, leave the person in the Employees list in QuickBooks; OR
- You have added the person in both Vendors list and Employees list.
Choose Employees > Employee Center.
Double-click the person's name.
At the end of the person's last name, enter the word employee (or something that identifies them as an employee), and click OK.
Choose Vendors > Vendor Center.
Click New Vendor at the top and add the person as a vendor.
Note: Be sure to fill out all the information. To properly report 1099 information, you must mark the person as 1099 eligible, and enter their tax ID and complete address.
Choose Reports > Accountant & Taxes > Transaction List by Date.
Click Modify or Customize Report and select All in the Dates field.
Click the Filters tab, select Name in the filter box on the left, select the employee name's (with "employee" or your own identifier on the end) in the Name field, and then click OK. A report appears that contains transactions for this person, including checks written to them.
Double-click the first check listed in the report. This opens the Write Checks window
In the Pay to the Order of field, select the vendor name you added for the employee in question, and click Save & Close.
Change all transactions to the new vendor name by repeating steps 9 and 10 until all necessary checks have been reassigned the new (vendor) name. You can then delete the employee's name from the Employee list, as long as there are no other transactions associated with it.
