State Withholding

Has anyone setup AP/1099s to include State Withholding? Pennsylvania has a new law that requires us to withhold 3.07% from any non-PA supplier that is 1099-applicable. We are trying to determine how to setup and how to have it reflected on the 1099s. I was able to setup and get the payments to split between the supplier and PA DOR, but I don't know how the State boxes on the 1099 form are populated. I am not having much luck asking Oracle. Any guidance is greatly appreciated! This bill went into effect 1/1/18, so we are already behind.

Thanks, Carrie. I just responded to another person regarding this issue. I think reporting on the 1099 is going to be our problem now.

Alicia Kinsey
Manager, Financial Business Systems
KAR Auction Services, Inc.

Thanks, Kevin.

I was able to get the withholding setup similar to how you described. Now my issue is how to get it on the 1099 form. From the documentation I could find, it states you have to enter the amounts on the supplier location in the withholding section. So, we have to determine how much we paid each vendor, how much we withheld, manually enter on the vendor location, verify the vendor got paid over $600 to actually get a 1099 and then when the 1099 process is all over, create a new effective dated row for the vendor location to remove the info so it doesn’t populate the next year. This seems like a horrible process.

Alicia Kinsey
Manager, Financial Business Systems
KAR Auction Services, Inc.

Hi Alicia,

I have not actually set up and tested but did do some research.  On vendor withholding set up I would add a new Rule to apply to1099, but I think jurisdictions are what may help.  According to peoplebooks:  Jurisdictions introduce an additional level of classification between the withholding type and class. Jurisdiction also enables you to define different withholding percentages based on where the vendor is located as well as on the classification (or activity) of a given transaction.  Hope this helps some.

Carrie Weltz

Alicia,

I haven't run this for PA but, you can probably just add a new rule with the PA information: Set Up Financials/Supply Chain > Product Related > Procurement Options > Withholding > Rules.  Then associate that rule to a new entity (PA), which would be ideal, or add the rule to an existing entity on the page: Set Up Financials/Supply Chain > Product Related > Procurement Options > Withholding > Withholding Entities.

Hopefully, that helps…

Kevin Meyer, JD