How do I exclude reimbursement contractor payments from 1099?

Thanks for posting in the Community, @wcarol312. 

The amounts reported in 1099 are based on the expense accounts you've mapped for each transaction, such as their reimbursements. You'll have to change the categories that aren't included in the mapped categories of Box 7. This way, the amounts will be excluded from 1099.

I'd first suggest consulting your accountant to determine the appropriate expense accounts on each contractor payment so you can exclude those amounts. Once verified, perform the steps below: 

1. Go to Expenses from the left menu. 
2. Select Vendors.
3. Locate the vendor/contractor's name.
4. Find the transaction and click View/Edit under the Action column.
5. Under the Category column, change it into different category type.
6. Click Save.
7. Repeat the process for other reimbursement contractor payments.

The screenshot below shows you the fifth to sixth steps. 

After that, finish preparing your 1099s in the program. Then, file them to the IRS to ensure the forms are submitted on time. 

For more information on the payments you need to report and how to fill in the boxes, go through this article: Payments to Report and To Exclude on Form 1099-MISC. You can also get answers to the frequently asked questions (FAQs) about this form by visiting this link: 1099 FAQs. Additionally, I recommend checking out the IRS PDF guide to learn more about its filing instructions. 

I'm just a post away if there's anything else you need. Have a good day, @wcarol312. 

This didn't help.  The categories are already selected to reflect what the reimbursements are for.  For example, the categories are shipping, storage, etc.  The reimbursement went to the contractor - and is appearing on the 1099.  How do I leave it off?

Hi, CozyVet.

I'm here to help you to remove the reimbursement amount.

We'll need to change the transaction category that isn't included in the mapped category of Box 7. This way, it will be excluded from your 1099. Here's how:

1. On the left panel, click Expense, then Vendors.
2. Choose the vendor/company name.
3. Find the transaction and Tap View/Edit under Action column.
4. Under Category column, change it into a different category type.
5. Hit Save and close.

I also suggest seeking an accountant, you can ask them if it's advisable to exclude those amounts.

In addition, I've added this article that you more information about paying bills in QuickBooks Online.

I'm only a few clicks away if you need assistance about excluding an amount in 1099 contractors in QuickBooks. It's always my pleasure to help you out again.