Vendor Registry is responsible for setting up all vendors used for payment by state agencies. The policies and procedures established and used by Vendor Registry for 1099 reporting adhere to OMB Fiscal Policy 110 - Form 1099 Compliance and IRS requirements. View IRS Backup Withholding Requirement.
The state is responsible for issuing a 1099 for payments made by check/ACH. The Internal Revenue Code requires that Form 1099 be filed for certain payments. A reportable payee is an individual, combination of individuals, sole proprietorship, partnership, or trust. The agency is required to withhold 28 percent of the payment to the payee if Form W-9, Request for Taxpayers Identification Number and Certification, is not filed with the agency. A W-9 is required for all non-state employee vendors NOT paid with a procurement card and is to be filed with Vendor Registry.
All monies received by the payee must be reported. It is the payee's responsibility to report to IRS those expenses that are business connected. Non-state employees must be paid as state employees when expenses are involved. The same IRS rules apply if there is no overnight stay. Agencies that pay for these expenses must report them as taxable income.
All 1099 payments and questions on forms received should be addressed to the agency that made the payment.
Contact the State Procurement Office or 701.328.2773 for questions.
1099 Information Disclaimer
To ensure compliance with requirements imposed by the IRS, any tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.
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