Criteria for Determining Payments Subject to 1099 Reporting

NC A&T State University is accountable to the Internal Revenue Service and the North Carolina Department of Revenue for payments made for services rendered by non-University employees. In order for the University to comply with this obligation, disbursements charged against certain expenditure object codes are reviewed annually. Expenditure object codes reviewed are:

Disbursements may be charged against any expenditure object code listed above and still be excluded from 1099 reporting if any of the following conditions exist:

1. Payments made to a corporation (except health care providers, which are included).
   
2. Payments made to non-profit activities, governmental agencies, etc.
   
3. Rental payments made to real estate agents.
   
4. Payments made for the purchase of tangible merchandise.

Frequently, invoices for services rendered include the costs of travel or materials necessary in providing the service. Under these circumstances, the University has followed the practice of including the total amount of the contract/invoice in its 1099 reporting process.

In the case of travel expenses, if a consultant's original receipts are submitted to the University for reimbursement, those receipts should be included with the purchase request and coded to object 61922. For "Other Contracted Services" travel receipts, the code is 61992. The amount for travel expenses will then be excluded from 1099 reporting.

See also:

INDEPENDENT CONTRACTOR SERVICES

CRITERIA TO DISTINGUISH EMPLOYEE/INDEPENDENT CONTRACTOR