Reporting Independent Contractors (United States)

If your state requires businesses to report independent contractors, you can have the system automatically generate a report for all contractors meeting reporting requirements when posting payments in Accounts Payable.

To enable independent contractor reporting, you must set up information in AP Company Parameters, as well as required reporting information for each applicable vendor in AP Vendors.
  1. In AP Company Parameters (Pay Types/Discounts/ICR tab), select the Independent Contractor Reporting check box. When selected, the system triggers a search function during payment processing to locate vendors meeting reporting requirements.
    The system enables the Threshold Payment Amount and Report Title fields.
  2. In the Threshold Payment Amount field, enter the threshold amount. The payment threshold may differ by state, ranging from $0 to $2,500; however, it will typically be $600. Contractors meeting or exceeding this amount (and meeting other reporting requirements) are included when printing the AP Independent Contractors Report.
  3. If you are using a custom report for independent contractor reporting, use the Report Title field to enter the custom report title. If you are not using a custom report, leave this field blank. The system will automatically use the standard report (AP Independent Contractors Report).
    Note: The standard report follows California's reporting requirements. However, because reporting requirements may vary from state to state, you may choose to create your own report.
  4. In AP Vendors, enter the reporting information on the I.C. Report Info tab. The information on this tab is required for all states that require independent contractor reporting.
    Note: You must fill out this information for vendors you have hired who are independent contractors and:
    • for whom you are required to file a 1099-MISC form for their services,
    • to whom you pay $600 or more or enter into a contract for $600 or more and,
    • who are individuals or sole proprietorships
You are now set up for independent contractor reporting. When you process a payment batch (in AP Payment Posting), the system searches the batch for invoices for qualifying contractors. If an invoice is found, you will be given the option to run the AP Independent Contractor Report.

When you run the report, the system updates the Last Reported Activity display field in AP Vendors (I.C. Report Info tab) with the date on which the contractor was last reported. It is updated each time the Independent Contractors report is run for the vendor and is used to determine whether or not a contractor has been reported for the calendar year.

For more information about independent contractor reporting, see AP Independent Contractor Rpt .