Skip to Content

Withholding Tax Types and Withholding Tax Code

Good Afternoon SAP Guru's

I need some help with a very basic question. I need to configure WHT and EWHT for 1099 and 1042. I am in the US. Here is the configuration I completed so far which I hope is appropriate. Please tell me if it not.


Maintain Country

Define Reason for Exemption

*is this needed for 1099 not withholding?

Maintain Recipient Type

Define WHT keys

Check Recipient Types

*1042 only?

WHT type for invoice posting

*created I1 for WHT type for Invoice Posting

WHT type for payment posting

*created 42 for 1042

*created ST for 1099 State

*created FE for 1099 Federal

Define Rounding Rule for WHT

*is this necessary

Assign Condition Type to WHT type

*what is this for?

My big issue is that I am confused on Tax Type and Tax Code.

I believe it is required to have 3 tax types for invoice posting and 3 for payment posting? I have 3 scenarios each. They are as mentioned earlier

1099- not withholding

1099- withholding

1042- withholding

I haven't configured 3 tax types for invoice posting, only 1 at this time.

For tax code, I struggle with the tax code field because the field is only 2 positions and therefore, how do I differentiate the different codes listed on the 1099 and 1042 on here? There are 18 codes on a 1099 and 50 on a 1042. Any suggestions?

Do I need to enter 1099 codes twice because one is exempt and the other is withholding? Or is that the reason why I need to create a exemption reason code for WHT type?

Any help would be greatly appreciated.


Add a comment
10|10000 characters needed characters exceeded

Assigned Tags

Related questions

1 Answer

  • Posted on Sep 30, 2009 at 03:58 PM

    no response

    Add a comment
    10|10000 characters needed characters exceeded

Before answering

You should only submit an answer when you are proposing a solution to the poster's problem. If you want the poster to clarify the question or provide more information, please leave a comment instead, requesting additional details. When answering, please include specifics, such as step-by-step instructions, context for the solution, and links to useful resources. Also, please make sure that you answer complies with our Rules of Engagement.
You must be Logged in to submit an answer.

Up to 10 attachments (including images) can be used with a maximum of 1.0 MB each and 10.5 MB total.