We have a 1099 contractor that wants to have state backup withholding taxes taken out. When I set up a other current liability account (like I have for federal backup withholding) and set it up as tax line mapping 1099 - state taxes withheld it is telling me that it is the incorrect account to use with that tax line mapping?
Hi there, Allied3.
I'm here to help isolate the error you're getting so you'll be able to process 1099-MISC successfully.
Before we begin, let's make sure that your QuickBooks Desktop is updated to the latest release.
First, you'll need to create a bill or check to record the expense transaction including the vendor withholding with a negative amount (attached screenshot). 
Once done, when mapping an account in the QuickBooks 1099 Wizard window, the expense transaction will show on the Box 7 and the other current liability account will show on the Box 16. Also, to ensure your IRS threshold is updated, you can select the Show IRS 1099-MISC filing thresholds below and click Reset to IRS threshold (attached screenshots).
For additional reference, you can check these articles to learn more about 1099:
This will get you on the right track. Don't hesitate to leave a comment below if you have other questions about the 1099-MISC. I'll be around to help. Have a good one.
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