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author's profile photo Former Member
Former Member

Generic Withholding Tax Reporting Error

Dear SAP Experts,

We have been using the classic Withholding Tax which works just fine to generate print outs and the electronic file that we submit to the IRS. However, it does not seem to correctly provided data for alternate payees for example: if vendor A provides invoice and if we pay to vendor B (which is same vendor at different address) the system does not pick up the payment..The actual payment generates the 1099 requirement. If we were not submitting electronically we could execute the 1099 report for invoices as opposed to payments (for just those vendors with alternate payees).

I would appreciate if anyone could help me in resolving this issue.

Actually we are thinking to use the extended withholding tax but it does not appear to work correctly either it is not set up to generate the e-file or hardcopy 1099s and it also seems to be fixed on looking at invoices not payments.(which i think is not correct) For example .if we get in invoice in Dec 2009 ...but do not pay until Jan 2010...the invoice should not be counted in 2009 1099 data...the payment should be counted in 2010 1099 data. I wanted to confirm if the extended withholding tax performs in the way that i mentioned above, or iam wrong.

Kind Regards


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  • author's profile photo Former Member
    Former Member
    Posted on Jan 26, 2010 at 07:02 PM

    We are on ECC 6.0 and have been using the Extended Withholding Tax and it works correctly for Alternative Payees. Where we have the vendor master set up with an alternate or permitted payee. The 1099 is produced on the main vendor's ID and not the remit to address. In config, you have a choice whether to produce the file/forms based off the invoice or payment. It's under the Define Output Group. Choose your process (i.e. US_1099). There's a section entitled "Read Withholding Tax Items from" and you can choose Option 2 for Vendor Payments. This Define Output Group is also where you configure which Smart form to use and your DME file format and where to save your file. Hope that helps.


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