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Dynamics 365 Community / Forums / Microsoft Dynamics GP (Archived) / Payables garnishments&...
Microsoft Dynamics GP (Archived)

Payables garnishments/IRS levies

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Posted on by Q Factor 107
I have a customer in need of a feature in Dynamics GP to handle IRS levies against 1099 vendors. Many of their vendors are landlords, and the IRS requires that they deduct 30% of the payment to send to the IRS. Has anyone heard of a 3rd party product or a process in GP Payables to handle this?

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  • Q Factor Profile Picture
    Q Factor 107 on at
    Some additional info. I haven't heard from anyone, so I assume this isn't a common issue. Anyway, the requirement is that the 1099 amount should be the total payment to the vendor. The only workaround I've found so far is to set up a credit card attached to the IRS vendor, then manually enter a credit card payment. The system creates a voucher to the IRS in the background, the 1099 amount is the total amount of the invoice, and the vendor's check payment is reduced accordingly. If anyone has a better workaround for me, I'm all ears... Thanks!
  • L Vail Profile Picture
    L Vail 65,271 on at

    Q Factor,

    This one is a little out there, but it works. If you aren't already using it, setup the Withholding vendor in the Company Setup window. Administration>Setup>Company>Company and then hit the Options button. Enter the vendor ID (IRS) as the withholding vendor and put the withholding percentage in the field below.

    Now when you open your Vendor Card, you will see a 'Withholding' button. Select that button and then check the box on the next window saying the vendor is subject to withholding.

    Now, whenever you make a transaction for that vendor, it will ask you if that transaction is subject to withholding. If you say 'yes' then you will see a 'subject to withholding' checkbox with the rate that defaulted from company setup.

    Put in the whole invoice amount and post it. Now, when you mark off to pay him, it will withhold 30% and create a due to the withholding vendor. Now, here's the catch - you need to put a calculated field in your 1099 form that will add the amount in the withholding box to the amount they put in the regular box. That gets it done with much less pain.

    Kind regards,

    Leslie

  • Q Factor Profile Picture
    Q Factor 107 on at
    Thanks, Leslie! I'll test that option. Unfortunately, all of their payables come over from an outside system, so they aren't keying them in. I wonder if I activate the withholding as you describe, would the users be able to just edit the transaction to capture the withholding or do they have to get the prompt? Or perhaps the withholding is stored in the payables work table and we can update it directly when the transactions are written to GP? Finally, they have also informed me that sometimes it's an amount withheld rather than a percentage. It just gets more and more complicated!
  • Sheilajr Profile Picture
    Sheilajr 745 on at

    Hey Leslie,

    I just had a client who asked me how to handle the same thing.  Since we don't work in Australia I had not ever seen or needed the Withholding options.

    This method works well since it creates the document for withholding in a batch instead of posting so that you have the opportunity to change the description or document number before posting.  This may be necessary if it's needed on the check stub.

    The only drawback is the fact that you can only specify one vendor for this type of transaction.  I guess it's good that it doesn't happen very often.  At least none of my clients have mentioned a need.

    Thanks for submitting your creative solution.

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