Enter Supplier Tax Withholding Lines

Explanation

Use this activity to enter tax lines for tax withholdings on payments to the specified supplier. In the United States, this is known as Form 1099 income tax withholding.

Withheld tax amount is always calculated with the net amount of the invoice line as base.

Prerequisites

This activity requires that:

• A supplier and company exist.
• The Use Tax Type VAT check box be cleared in the Enterprise/Company/Invoice tab.
• At least one tax code with the Tax Withhold tax type be entered in the Accounting Rules/Tax/Tax Codes window if tax withholding lines should be created automatically for each invoice line.
• The Supplement Report Codes to Tax Withholding Lines check box be selected if taxes are to be withheld separately for federal and state purposes on invoice lines.
• The appropriate supplier income types be defined in the Enterprise/Tax/Income Types window.
• A supplier income type has been defined for the actual invoice line.

System Effects

As a result of this activity, taxes are withheld as specified on each invoice line, when the invoice is posted. Right after the invoice is posted to a voucher of function group I, a withholding payment transaction will be started automatically, provided that IFS/Payment is installed. The postings connected to this payment transaction are created on a voucher belonging to function group U.

Windows

Manual Supplier Invoice

Related Window Descriptions

Manual Supplier Invoice

Procedure

To enter tax lines:

1. Query for an invoice, or enter a new one.
2. In the Line Information area, select an invoice line.
3. Define a supplier income type for the invoice line.
4. Right-click and then click Tax Withholding/Reporting . The Tax Withholding/Reporting window appears.
5. Add, change, or delete tax withholding lines as necessary. 
6. If the Supplement Report Codes to Tax Withholding Lines check box was selected on the Enterprise/Company/Invoice tab, select a report code from the List of Values. This specifies whether the withholding is for federal or state purposes. If the tax line is for state withholding, the state connected to this report code must have been defined in Enterprise/Supplier/Invoice/Tax Withholding/Reporting.
7. If the Correspondence, Invoice Net Amount - Tax Withholding Base Amount check box is selected in the Enterprise/Company/Invoice/Tax Information tab, the tax base amount on the tax withholding lines are required to equal the net amount of the invoice. This only applies when the withholding base amount of the supplier is Invoice Net Amount.
8. Save your changes.