Use
In the United States, companies are required under law to annuallyreport their payments to 1099 vendors to the Internal Revenue Service(IRS). You use this report to evaluate withholding tax payment documentsfor your 1099 vendors, and to submit a file electronically (mandatoryfor 250 or more vendors) or printed on the IRS 1099-MISC form. If yousubmit a form, you must use the official preprinted IRS form; you canprint it using SAPscript form F_RFW1099M_2001, which you enter on theselection screen in the Form for Output field, under Outputcontrol.
This report replaces the RFKQSU30 report (1099-MISC Form, TapeReporting), and covers many functions of RFKQSU00 (Postcard Printout of1099 Vendor Addresses for Tax Code Request) and RFKQSU20 (1099Listings).

Prerequisites
You need to define your withholding tax codes so that they corresponddirectly to the official amount codes on the IRS form. For example,rents are reported in box 1, so you must create withholding tax code 1for rents.
To report state withholding tax, Customizing tables T005S and T059L mustbe maintained. You can only report state withholding tax if youparticipate in the Combined Federal/State Filing (CFSF) program. See"Federal and State Reporting" below for more details.

Scope of Functions

• You can select different company codes simultaneously, regardless of
whether they use classical or extended withholding tax functions.

• Vendors that exist in different company codes - but that have the same
tax identification number (TIN, which is either the social securitynumber or employer identification number) and vendor account number -are reported only once as a single vendor.

• One-time customers are taken into account, as well as alternative payees
and fiscal addresses (as defined in vendor master records).

• You can select payment documents by their document number, posting date,
or clearing date.

• You can report state withholding tax under withholding tax code 16 or
11.

• The report can generate a number of lists:

Vendors with incorrect TIN: these are not reported.
Vendors with correct TIN: these are reported.
Single line items of payment documents for vendors
Official 1099-MISC records (see "Records" below)

• You can create a record file and a local file. (In the former report,
you could only save the record file to an application server.) You canthen send the local file electronically to the IRS.
&RECOMMENDATION&
The system validates if the file path entered by the user aligns withthe file system configurations authenticated for the report.
The file system configuration includes a logical file nameFI_RFW1099M_FILE and logical file path FI_FQST_FILE_PATH,associated with the report. You should maintain the physical file paththat you need to use in this report, against the logical file pathFI_FQST_FILE_PATH using transaction FILE.
For further information on maintaining the physical file path, refer toDefining Logical Path and File Names.

Classical and Extended Withholding Tax
The report supports both the classical and the extended withholding taxfunctions.
In the case of classical withholding tax, it evaluates 1099-MISCpayments to vendors subject to withholding tax, and reports clearingpayment documents for vendors that have a 1099-MISC withholding taxcode.
For extended withholding tax, the report selectswithholding-tax-relevant postings for which withholding tax amounts areposted at the time of payment. For vendors with a 1099-MISC withholdingtax code, these can be:


• Clearing payment documents


• Partial payments


• Down payments

Records
The report output contains a number of records defined by the IRS:
T
Record T contains transmitter data, generated by the data you enter inthe Transmitter group box, as well as other data derived fromrecord B. It comprises one line in the file.
A
Record A contains payer/transfer agent data, generated by the data youenter in the Payer/Transfer Agent group box, as well as otherdata derived from record B. It comprises one line in the file.
B
Record B contains vendor data, which the report generates based on yourvendor selection criteria (via dynamic selections, vendor accounts,general selections, vendors, or vendor payment documents - all of whichyou can specify on the selection screen). It generally comprises manylines in the file.
C
Record C contains the sum over vendors. It is derived from record B, andcomprises one line in the file.
K
Record K contains the sum per state if the payer participates in theCSFS program. In this case, you must set the Combined Federal/State
indicator (in the Record File Properties group box) andspecify the states (under Vendors). Withholding tax is onlyreported if base amounts exceed the minimum amounts. Record K cancomprise several lines in the record.
F
Record F marks the end of the IRS file; it contains nowithholding-tax-relevant data.

Federal and State Reporting
This report supports several scenarios for reporting federal and statewithholding tax:
In most cases, you report the base amounts for federal withholding taxonly. No tax is withheld or paid; you are simply reporting the baseamounts - according to the offical amount codes on the 1099-MISC form,that is, 1 for rents, 2 for royalties, and so on. These amount codescorrespond to your withholding tax codes.
Occasionally, you may need to withhold tax, in which case you mustreport both the base amounts and the withholding tax amounts.
Both of the above cases represent federal withholding tax only. In somestates, you are required to additionally report state withholding tax,as a participant in the CFSF program:
In some cases, you might only report base amounts for federalwithholding tax to the IRS. The IRS then passes this information on tothe state tax authorities.
If a state has its own withholding tax and federal tax has beenwithheld for the vendor (as in case 2 above), then a separate state taxis withheld. Until the end of 2000, state tax withheld was reportedunder withholding tax code 11 (which corresponded to official amountcode 11 on the IRS form). Starting in 2001, the official amount code waschanged to 16. This report enables you to report state withholding taxusing either withholding tax code 11 or 16.
For state withholding tax, it is essential that your Customizing tablesT005S and T059L are maintained. State withholding tax is only reportedif the base amounts for withholding tax exceed the minimum amountsdefined per state.