1099s

What is a 1099?  It is an informational return to report various types of income other than wages.

The IRS requires the state to issue 1099s to reportable entities for services, rentals, awards, certain type of grants, interest, dividends, and certain real estate purchases. 

The Department of Administration submits five (5) types of 1099s:

  • 1099-MISC:  Services, rents, awards
  • 1099-G: Governmental payments (tax refunds are the Dept of Revenue)
  • 1099-INT:  Interest
  • 1099-DIV:  Dividends
  • 1099-S:  Real estate

Two things must occur for there to be 1099 reporting:

  • The entity must be subject to 1099 reporting
  • The payment must be reportable

If the vendor is not set up in SMART you must obtain a W-9.

What entities are NOT (currently) reportable?

  • Corporations are NOT reportable UNLESS they provide medical or legal services
  • Governments
  • Tax exempt organizations

What vendors are reportable?  Everyone else

LLC stands for Limited Liability Company. The federal government does not recognize a LLC as a classification for federal tax purposes. A LLC can be a corporation, partnership or sole proprietorship.

Reportable:

  • 01 Rental
  • 02 Royalties
  • 03 Prizes, awards, other
  • 06 Medical, including medical laboratory service
  • 07 Services including legal
  • 14 Gross proceeds
    • Payments made to an attorney as part of a legal settlement or court order.
    • Gross proceeds may be issued in the names of the attorney and the client.
    • Gross proceeds may include an amount for the attorney’s services.
    • If you can determine the amount of attorney fees included in the gross proceeds, report the fee in box 7 and nothing in box 14.

Not Reportable:

  • Commodities and refunds

If a vendor has a question about a 1099 received, the vendor can contact the 1099 hotline at (785) 368-8999 or submit a question online at https://www.admin.ks.gov/offices/osm/1099-information/1099-information-request-form.