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sunsetcoveapollo
Level 1

Is it possible to create a payment method and mark it as 1099 excluded (debit card, paypal), or do these transactions need to use the credit card payment method?

I don't see a way to exclude electronic payments from a 1099 without using specifically the "credit card" method, which is imprecise. I used a debit card, or PayPal/Venmo from my bank account.
5 Comments 5
ChristineJoieR
QuickBooks Team

Is it possible to create a payment method and mark it as 1099 excluded (debit card, paypal), or do these transactions need to use the credit card payment method?

Hello there, @sunsetcoveapollo. I can help you exclude payments in 1099 filings within QuickBooks Online.


Payments made to 1099 vendors by credit card, debit card, or third-party system, such as PayPal, are not included in the 1099-MISC and 1099-NEC calculations.


I recommend creating a dummy credit card payment method and assigning it to a transaction to exclude it from 1099.

 

You can utilize this article to understand which payments are excluded from a 1099-NEC and a 1099-MISC.


For more information, I found the following links that you can use as a resource:

 

 

We are here to support you and look for the best solution to all your queries. Stay safe!

sunsetcoveapollo
Level 1

Is it possible to create a payment method and mark it as 1099 excluded (debit card, paypal), or do these transactions need to use the credit card payment method?

Thanks for replying.  What do you mean by "create a dummy credit card payment method"?  A standard credit card payment method exists, and is excluded from the 1099.  Are you saying the solution is just to record debit card, paypal, venmo payments as "credit card" even though they aren't?

Rasa-LilaM
QuickBooks Team

Is it possible to create a payment method and mark it as 1099 excluded (debit card, paypal), or do these transactions need to use the credit card payment method?

Thanks for coming back to the Community, sunsetcoveapollo.


Let me route you in the right direction on how to track the payments mentioned above.


I can see that these payments are from your bank and should be recorded using the correct account type. However, QuickBooks Online (QBO) will automatically exclude them when you select a credit card. That’s why you’ll have to choose that one.

 

When processing the tax form, you’ll also see the amount in the Excluded column. I'm adding a screenshot below for visual reference.exclude1099.png


If you wish not to use the credit card account type, I suggest consulting with your accountant. They can guide you on how to input these payments in QBO and make sure your records are in order.


I know my peer already shared this article above, let me add it again for additional resources: Understand which payments are excluded from a 1099-NEC and 1099-MISC. It provides detailed steps on where to look for excluded payments. Make sure to go to the Where can I find the payment information? section to view them.


Also, this reference will guide you on how to troubleshoot when the amount on your 1099 is incorrect: Fix missing contractors or wrong amounts on 1099s. From there, you’ll learn about adding a contractor.


Keep me posted if you need further assistance processing your 1099s. I’m always ready to help you. Have a good one.

show-me
Level 1

Is it possible to create a payment method and mark it as 1099 excluded (debit card, paypal), or do these transactions need to use the credit card payment method?

does the "dummy credit card" payment method create a post to a general ledger account or does it only apply to 1099  processing?  In the Payment Type List I have a Venmo payment type, do I simply mark it "Credit or Debit Card"? to accomplish the 1099 exclusion?

Rea_M
Moderator

Is it possible to create a payment method and mark it as 1099 excluded (debit card, paypal), or do these transactions need to use the credit card payment method?

Thanks for joining the thread, show-me. I'll clarify further which payments are excluded from 1099 forms in QuickBooks, ensuring accurate filing.

 

The "dummy credit card" will not be posted in the General Ledger or used for 1099 processing as it's just a payment method that can be deleted anytime. It's also not the foundation of QuickBooks that you pay for with a credit card. To exclude the amount paid via Venmo in 1099, you'll have to enter any of these terms in the Check no field: Debit, Debitcard, DBT, DBT card, DCard, Debit cd, Visa, Masterc, MC, MCard, Chase, Discover, Diners, Paypal.

 

For more details about this, please see this article: Which payments are excluded from a 1099-NEC and 1099-MISC.

 

Once everything is all set, create and file your 1099s with QuickBooks Online.

 

Also, I'm including this article to help answer the most commonly asked questions about 1099s in QuickBooks: 1099 concerns.

 

We're always ready to back you up if you need more help with your 1099s in QuickBooks Online. Don't hesitate to add your reply below, and we'll circle back to assist you.

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