Define Reporting Entities For income tax Reporting

Use the Reporting Entity window to define reporting entities for your 1099 tax reporting. A reporting entity is any person or organization that has a unique Tax Identification Number (TIN).

If you use the NACHA payment format, the Name and Tax ID Number are used to identify the reporting entity that is initiating the electronic payment. When you define your disbursement bank account, enter the tax reporting entity in the Alternate Account Holder field of the Bank Accounts window, since Payables allows you to define more than one entity per organization. 

Payables provides country-specific validation of the taxpayer identification number. The validation rules are based on your home country, as defined in the Member State field of the VAT Registration region of the Financials Options window. If your home country is the same as your Default Country Profile option, validation is performed in accordance with the rules of your home country. If your home country is different from your default country, no validation is performed.

You can submit the following 1099 reports for a specific reporting entity:

• 1096 Form

• 1099 Forms

• 1099 Invoice Exceptions Report

• 1099 Supplier Exceptions Report

• 1099 Payments Report

• 1099 Electronic Media

For each reporting entity, you assign one or more balancing segment values. For example, an enterprise defines a reporting entity called Headquarters which is comprised of Company 1, Company 2, and Company 3 (three balancing segment values). 

When submitting a 1099 report, Headquarters is entered as the reporting entity for the report. Payables prints on the 1099 report the accumulated payments for Companies 1, 2, and 3. Payables sums up the paid invoice distributions that have these company balancing segment values in their accounts.

Balancing segment values must be unique across reporting entities. Therefore, the list of values for the Balancing Segment field of the Reporting Entity window displays only balancing segments not already assigned to other reporting entities.

Defining Tax Entities

Prerequisites

• Define the locations of each reporting entity. See: Setting Up Locations, Oracle Human Resources Management Systems Enterprise and Workforce Management Guide.

• Use the Key Flexfield Segments window to define Balancing Segment values.

• Define Payables Options.

To define tax entities, in the Reporting Entity window:

• Enter the Name, Location, and Tax ID Number of the reporting entity you are defining. For example, a Tax ID Number can be an individual's social security number or a corporation or partnership's federal identification number/federal tax ID. If you submit the 1099 Electronic Media for this tax entity, the Tax ID Number value should be nine digits or the program will fail.

• Enter one or more balancing segment values that comprise the reporting entity.