Financial Services Manual (FIN)

Effective: 6/21/1984

Revised: 3/1/2007

FIN 421–04: Tax Reporting—IRS Form 1099

Purpose

To code disbursements for professional fees, independent contractor services, royalties, copyright payments, and other payments requiring tax reporting

Sources

Internal Revenue Service

University policy

Applicability

All payments for services, rentals, royalty, and copyright payments made to payees other than corporations, governmental agencies, colleges, and universities, excluding employee expense reimbursements and payments to nonresident aliens.

Policy

All professional fees, and certain other payments that require reporting on IRS Form 1099 as listed in the table below are to be charged to the indicated object/sub-object code(s). ASU, along with other state agencies, provides Form 1099-related information to the State of Arizona Department of Administration for preparation of consolidated Form 1099s. Since tax reporting is required for payments to individuals or organizations other than corporations, government agencies, and colleges/universities, it is important that departments obtain accurate Social Security or taxpayer identification numbers and permanent addresses for new vendors by securing and submitting a completed ASU Substitute W-9 and Vendor Authorization with the vendor entry (VE) document. D

Type of Service and Code for Payments Requiring IRS Form 1099
Type of Service	Object/Sub-object Code
Professional and independent contractor services, maintenance and repairs, printing, reproductions, and photography	All object/sub-object codes beginning with 7310 except 7310 13, documented expense reimbursements. Certain deferred artist fees are charged to the balance sheet account code 2703, and certain independent contractor services coded to cost of sales 7010 23 are also subject to Form 1099 reporting.
Subagreements	All object/sub-object codes beginning with 7314 or 7315.
Participant stipend payments	Object/sub-object code 7400 20.
Rental and royalty fee/copyright payments	All object/sub-object codes beginning with 7340.
Land improvements, building improvements/remodeling, new construction costs, planning/design/management costs, and building fixtures	All object/sub-object codes beginning with 7890 except land acquisitions 7890 01.

endtable

For university departments coding purchases to the Cost of Goods Sold object code, 7010, any purchases of the type indicated above where an IRS Form 1099 is required must be coded to cost of sales object/sub-object code 7010 23.

Cross-References

For information on employee expense reimbursements, see FIN 420–01, “Faculty and Staff Reimbursements.”

For information on awards to faculty, staff, and students, see:

1. FIN 420–04, “Awards to Faculty and Staff, and Related Tax Status,”

   and

2. FIN 420–05, “Employee Postgraduate Research Stipends/Grants.”

For information on tax reporting for nonresident aliens, see:

1. FIN 425–04, “Nonresident Alien Independent Contractors and Other Foreign Entities”
2. FIN 425–05, “Student Financial Support Payments to Nonresident Aliens”

   and

3. FIN 425–06, “Payments to Postdoctoral Nonresident Aliens.”

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