Recipient Information Determination Logic for 1099 Forms
Before the 1099 forms are in the status of Submitted, Rejected, or Accepted, they are in the "pre-filing" stage. Think of this stage as the preparatory phase, where all necessary details are being gathered and cross-checked. During this stage, recipient information can be updated or modified in two primary ways:
- Payer Edits: The payer manually edits the recipient's details in Wingspan, such as their name, Tax Identification Number (TIN), address, status or amount.
Example: If a company realizes they have the wrong address for a contractor in Wingspan, they can manually correct it while still in the pre-filing stage. - Recipient Edits: The recipient themselves provides their W-9 information in Wingspan, which then gets updated in real-time.
Example: A freelancer updates their address in Wingspan during the pre-filing stage. However, later on, the company they work for manually changes the address in Wingspan to a previous one they have on file. This means the freelancer's updated address is overwritten, and the old address remains on the form.
It's crucial to note that during this pre-filing stage, any changes or edits made by the payer in Wingspan will overwrite the current W-9 information if no edits have been made by the payer. This ensures that the most recent and relevant details are always captured.
Wingspan's Logic for Determining 1099 Recipient Information:
-
EIN (Employer Identification Number) Preference:
-
If an EIN is preferred:
- The 1099 will display the following:
- Name: Legal business name.
- TIN: Employer Identification Number.
- Address: Business address, but if it's unavailable, the personal address will be used.
- The 1099 will display the following:
-
If an EIN is not preferred, the system will then check if the recipient operates as a sole proprietor.
-
-
Sole Proprietorship / Single Member LLC Check:
-
If the recipient is a sole proprietor or single-member LLC:
- The 1099 will display:
- Name: A combination of the legal business name, first name, and last name.
- TIN: Social Security Number.
- Address: Personal address.
- The 1099 will display:
-
If the recipient is not a sole proprietor:
- The 1099 will simply display:
- Name: The individual's first and last name.
- TIN: Social Security Number.
- Address: Personal address.
- The 1099 will simply display:
-
Through this process, Wingspan ensures that the information on the 1099 form is accurate and tailored to the nature of the recipient's business structure.
Updated 6 months ago