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Dynamics SL does not have the functionality for automatically accruing backup 1099 withholdings. I assume it is the same as accruing for sales (use) tax that is not invoiced by the vendor. I have pasted in the contents of a Knowledge Base article that may help you with this issue. Solomon does not have a built in method of tracking Use Taxes, however, below are a few suggestions as to how Use Taxes may be entered and tracked in Solomon. All resolutions will update GL appropriately, but offer alternate methods for tracking the tax.

RESOLUTION

Resolution 1 - This resolution will allow the user to track the Use Tax information in Shared Information but will not create a voucher in AP for the Use Tax vendor. This will be accomplished by creating the Use Tax info in the original voucher but also entering an offsetting transaction line in voucher and Adjustment Entry to reverse the effects of the tax on the voucher.

For example the original voucher is for $1,000.00. Use tax associated with it would be 2% or $200.00.

1. Following the above example, create a Tax ID for the Use Tax in Shared Information Tax Maintenance (21.280.00) for 2% (or the appropriate percentage for the Use tax). When setting up this tax, enter the appropriate Use Tax expense account on the ‘Purchasing Accounts’ tab.

2. Enter the voucher as normal in Voucher and Adjustment (03.010.00), entering the Use Tax ID in the transaction line and allowing Solomon to calculate the tax of $200.

3. Enter an offsetting transaction line to the Sales Tax Payable account for a negative amount of the tax ($200). This offsetting record will allow the voucher to maintain the value of $1,000. The tax ID for the offsetting transaction line should NOT have a tax ID included.

4. This will result in a negative debit (credit) to the Sales Tax Payable account for the amount of the tax ($200), a credit to Accounts Payable for the amount of the voucher ($1,000), a debit to the default Expense account for the amount of the voucher ($1,000), and a debit to the Sales Tax Expense account for the amount of the tax ($200).

5. The Tax Detail (21.660.00)report in the Shared Information module can be used to monitor the entries to this tax ID. The Detail GL report in the General Ledger module can also be used to monitor entries to the tax expense and tax payable accounts.

Resolution 2 - This resolution will track the Use Tax through a vendor in AP by entering a separate voucher in the batch to account for the tax, but will not update sales tax information in Shared Information. The Vendor Trial Balance in AP could be used to monitor the amount of Use Tax payable.

1. After entering a voucher for the amount of the invoice, enter another voucher for the amount of the tax.

2. The vendor on this second voucher should be the state taxing authority.

3. The Override tab should be used to replace the default AP account with the Sales Tax Payable account.

4. Enter the Sales Tax expense account in the transaction detail.

5. When setting up this vendor in Vendor Maintenance, the default AP account could be set to the Sales Tax Payable account, and the Sales Tax Expense account could be entered as the Default Expense account. This would allow for easier data entry since the overrides above would not be necessary.

Resolution 3 - This resolution will track purchases subject to Use Tax for manual calculation of Use Tax.

1. Set up a Tax Code of USE and set it to calculate 0% tax.

2. Apply this tax code to all appropriate items during voucher entry. It will calculate to 0.00 dollars tax, but will track the purchases subject to the tax.

3. At the end of the month run the Tax Detail report for the USE Tax ID and calculate how much Use Tax is owed on the purchases subject to the tax.

4. Add a voucher in Accounts Payable to pay the Use Tax to the appropriate vendor and debit the appropriate expense account in the grid.

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Backup Withholding - 1099 Vendors

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