Prior Year Indicator for 1099-MISC, 1099-NEC and 1042-S Files
I am a Product Manager for SAP Business ByDesign in financials. The objective of this article is to inform you that a new field “Prior Year Indicator” was introduced and what is the reason for that.
For the US, when filing withholding tax returns, you can now indicate if you are filing returns for the
previous year. A new checkbox Prior Year Indicator is available in the General section of the Business Document Overview.
For 1099-MISC, 1099-NEC and 1042-S withholding tax returns the SAP Business ByDesign generates electronic files in which are included all the details corresponding to the transactions. If user creates return for the previous year the new checkbox “Prior Year Indicator” should be checked before the withholding tax return is released.
When “Prior Year Indicator” is checked, in the electronic files “P” indicator is reported. For the 1099-MISC and 1099-NEC the “P” indicator is reported on the sixth position and in case of electronic file for 1042-S return on the 199th position.
This blog post supports you in applying the regulations for the 1099 Miscellaneous Tax Return and 1099 Non-Employee Compensation Tax Return in the SAP Business ByDesign.