|INFORMATIONAL CIRCULAR NO. 11-A-005 ||Supersedes 10-A-007 |
|DATE: ||December 16, 2010 |
|SUBJECT: ||Procedures for filing 2010 Form 1099 Information Returns |
|EFFECTIVE DATE: ||Immediately |
|CONTACT: || |
|APPROVAL: || |
|SUMMARY: || |
Procedures for Filing Calendar Year 2010 Form 1099 Information Returns
For calendar year 2010 1099 reporting data from STARS and SMART will be required.
1099 reporting for the State of Kansas is comprised of two processes, the first being the issuance of the 1099 to the payee with the second being the electronic filing of the 1099 informational returns with the Internal Revenue Service (IRS). While most 1099 transactions are recorded in the Statewide Management and Recording Tool (SMART), and require no additional action by state agencies; there are some payments that occur outside of SMART or STARS, or the information to be reported to the IRS is not in SMART or STARS. These transactions result in unique reporting procedures, and are comprised of the following:
- Locally administered interest payments exceeding $10 are to be reported on IRS Form 1099-INT. These payments typically represent interest paid from trust funds to clients of institutions with the Department of Social and Rehabilitation Services and the Department of Corrections.
- Purchases of real property, exceeding $600 are required to be reported on IRS Form 1099-S (Do not include rental or construction costs). Additional information required by this form includes a legal description or address of the property and the closing date of the purchase transaction. If the transaction is post SMART, then SMART should be utilized to create these forms by properly completing the 1099 withholding on the payment voucher. Whereas, STARS transactions (Jan. 1, 2010 – June 30, 2010) continue to require manual processing.
- State Fair premiums are to be reported on Form 1099-MISC.
Agencies which have the transactions discussed above are responsible for the preparation and delivery of the appropriate 1099 form to the payee prior to January 31, 2011. To meet this reporting requirement, agencies can prepare and mail their own 1099s, or if the Division of Accounts and Reports has provided this service in prior years for the agency, the agency can request the Division of Accounts and Reports to perform this service again this year. The Division of Accounts and Reports has provided this service in past years to the following agencies: Kansas Commission on Veteran’s Affairs (Veterans’ Home or Soldiers’ Home), Juvenile Justice Authority, SRS, Parsons State Hospital and Training Center, and Larned State Hospital. If the agencies listed wish for Accounts and Reports to provide this service for calendar year 2010 1099s, please contact Randy Kennedy to coordinate.
For agencies requesting Accounts and Reports to produce and mail the 1099s, agencies will need to prepare a text file, or Excel file, or DA-43. The file or listing needs to be received by the Division of Accounts and Reports by January 19, 2011 to ensure the 1099s are distributed by the January 31, 2011 deadline. Please indicate on the email or cover letter submitted with the electronic file or listing that the Division of Accounts and Reports produces the 1099s.
For those agencies preparing and mailing their own 1099s to payees, the procedures for handling 1099 information returns for calendar year 2010 are as follows:
- Prepare and deliver the appropriate 1099 form to the payees prior to January 31, 2011. Do not mail the 1099 forms directly to the IRS or to the Kansas Department of Revenue; the Division of Accounts and Reports will provide an electronic file containing the 1099 information to the federal and state taxing authorities. The payer's FEIN to use for the State of Kansas is 48-1124839.
- For STARS transactions (Jan. 1, 2010 – June 30, 2010), agencies reporting applicable purchases of real property may submit the IRS and /or the State of Kansas copies of the 1099-S forms to the Division of Accounts and Reports (at the address provided below), and Accounts and Reports will then submit this information to the taxing authorities. SMART transactions should be recorded in SMART.
- If any agency finds it necessary to issue a corrected information return, the payee should be provided a copy as soon as possible. The IRS copy of the corrected form (marked "corrected") should be forwarded promptly to the Division of Accounts and Reports (at the address provided below.
Since the State of Kansas is classified as a single payer entity by the IRS (all payments by state agencies are reported under one FEIN) and federal law and regulations require the filing of 1099 information returns by magnetic media or electronically, it is the responsibility of the Division of Accounts and Reports to transmit all 2010 calendar year 1099 informational returns to the IRS electronically. To aid the Division of Accounts and Reports with the electronic filing requirements, agencies reporting the expenditures discussed above, and with fewer than 20 records, may use the DA-43 form (http://www.da.ks.gov/ar/forms/ ), or may submit a text file, or may submit an Excel file. If you have 20 or more records, please submit the records in a text file or in an Excel file following the format shown in the attached NON-STARS 1099 Record Layout form. All electronic files or listings for ‘1099 information reporting only’ need to be received by February 8, 2011. Please email all electronic files to Randy.Kennedy@da.ks.gov, and mail any paper listings to:
Division of Accounts and Reports
Central Responsibilities Team
900 SW Jackson, Room 351-S, LSOB
Topeka, Kansas 66612-1248
Attention: Randy Kennedy
Please note that the February 8, 2011 deadline is only available to those agencies that prepare and mail their own 1099s, and the Division of Accounts and Reports just files the informational return with the IRS. If the Division of Accounts and Reports produces and sends the 1099s for the agency, the January 17, 2011 deadline is applicable.
When submitting data via a text or Excel file, please be sure to follow the formatting instructions, which include:
No hyphens or dashes in the Vendor Number field, entry is the nine digit FEIN or SSN,
Record and capitalize the first name, middle initial, last name in the Name field (example, JOHN C SMITH). Do not include forms of address (Mr., Ms., etc), or punctuation (i.e. periods or commas), or any other special characters.
No hyphens or dashes in the Zip Code field, just report the five (left justify) or nine digit
zip code, (i.e. 66612-1248 would be reported as 666121248).
No dollar signs or decimals, in the amount field, just report the amount (i.e.
$3,312.48 would be reported as 000000331248).
Attachment: 1099 FORMATS - 1099 RECORD LAYOUT xls