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Stonecypher
Level 2

Credit card payments are showing up on my 1099 NEC forms

One of the independent contractors who does work for me was paid mostly by bank debit card last year. Only one payment was an ACH. And, each of these transactions is correctly marked with their payment method. However, when I run the 1099 NEC forms in QB, everything I paid this contractor is showing up. I thought QB was supposed to filter out CC payments. How do I fix this?

14 Comments
MadelynC
QuickBooks Team

Credit card payments are showing up on my 1099 NEC forms

Let’s get this sorted, @Stonecypher.


Yes, QuickBooks won’t display payments that you made electronically to contractors since these are reported for you by the credit card company and the bank. To get this resolved, you’ll want to make sure you haven’t included the payments when mapping them.


If the issue persists, you can generate the form by logging in to an incognito or private browser for testing. To do so:

 

  • Google Chrome: Ctrl + Shift + N
  • Mozilla Firefox: Ctrl + Shift + P
  • Safari: Command + Option + P

If it works. You’ll need to clear your regular browser's cache. That way, the system can start fresh. You can also use different browsers as an alternative.

 

Check out this article to learn more about how to get your 1099s ready for filing. It has information to check the status and list of frequently asked questions, along with its answers.

 

I'd appreciate it if you can update me on how this works. I want to make sure everything is taken care of. Thanks!

Stonecypher
Level 2

Credit card payments are showing up on my 1099 NEC forms

I followed those directions but there is no change. I opened an incognito window, cleared my browser's cache, logged into QB online, tried to run the 1099 NEC forms and all the debit card payments to that vendor still show up. I did a live chat with QB support and they couldn't figure it out either. He said I could just report the money paid via debit card, but I don't think that is true. Aren't there negative consequences to putting payments on the 1099 NEC that shouldn't be there? He seemed to think that since it was paid via a debit card, it just counted as a bank transaction, which according to everything I read, including on the IRS and QB websites, isn't true. Do I need to create a new payment account for the debit card? That seems like it would mess up the ledger and other things. 

Surely, I'm not the only person who has paid a contractor using a debit card. It seems that choosing the "credit card" payment method should be all that is required for QB to know it was a CC payment and not include it on the 1099 NEC. I also can't find a way to alter the amount manually on the 1099 NEC. 

ShiellaGraceA
QuickBooks Team

Credit card payments are showing up on my 1099 NEC forms

Thanks for getting back to us here, @Stonecypher.

 

Appreciate you for doing the basic troubleshooting steps in fixing the 1099-NEC form. Since the IRS doesn't require electronic payments to be reported on Form 1099-MISC, you'll want to override the form to remove the payments (credit card, debit, gift card, PayPal, etc.) Just make sure to review the payment total for each box you've selected before filing.

 

With regard to creating a payment account, you'll want to create one expense account for the accounts that will be reported on the 1099-NEC. This way, you'll have a separate account for each of your forms (1099-NEC and 1099-MISC).

 

Here's how:

 

  1. Go to the Gear menu and hit Chart of Accounts.
  2. Tap New to create a new account.
  3. In the Account Type ▼ dropdown, choose Expenses.
  4. Select a Detail Type. Then, enter a Name and other account information.
  5. Click Save and Close.

You can also check out these handy articles for more information about preparing 1099-NEC.

 

Feel free to reply to me anytime if you still have questions or clarifications with the forms. I'll be around for you. Take care and have a great rest of the week.

Stonecypher
Level 2

Credit card payments are showing up on my 1099 NEC forms

How do I override the form to remove the payments? I don't see where I can do that.

Also, I don't think I need to do anything with the chart of accounts because I'm not filing both NEC and MISC forms, but only the NEC form. When I mentioned payment accounts above, I meant the bank account that the debit card payments come out of. I don't mean setting up separate expense accounts. 

Catherine_B
QuickBooks Team

Credit card payments are showing up on my 1099 NEC forms

Hello there, Stonecypher.

 

When preparing your 1099s you have the option to select the box for the types of payments you made and the expense accounts you use for these payments. You'll want to modify the transaction you created posted to the account as a way to override the amounts posted on 1099-NEC. 

 

You can review which account you select for 1099-NEC by following these steps:

 

  1. Go to the Payroll or Workers menu.
  2. Select Contractors.
  3. Click Prepare 1099s and then Continue your 1099s.
  4. Under step 2, in the Most common payment types section, select Non-employee compensation to see which account to use or you selected. 
  5. Do the same thing under Federal Tax
  6. Then, exit on the screen and go to Accounting > Chart of Accounts.
  7. Delete and review payments if necessary.  

Go back to steps 1 to 5 to reselect the account and continue preparing your 1099-NEC. Here are links that will help you in identifying payment categories for 1099-MISC and 1099-NEC and how to prepare them. 

 

Keep me posted on how this works or if you have anything else you need help with. I'm just around the corner to keep an eye on your reply. Take care!

Stonecypher
Level 2

Credit card payments are showing up on my 1099 NEC forms

What do you mean in #5 to "do the same thing under Federal Tax"?

I followed these directions as much as I could, but I think you left some vital steps out somewhere because these directions don't make sense. Also, I can't go deleting payments, or that will mess up the accounting. None of those steps actually solve the problem of why payments marked as credit card payments are showing up on the 1099 NEC form. QB should be automatically filtering them out.

I'm just going to set up the same vendor twice, and on one version I'm going to not check the box that says to track payments for 1099 and then move all the debit card payments to that version of the vendor.

Adrian_A
Moderator

Credit card payments are showing up on my 1099 NEC forms

It isn't the kind of experience that we want you to have, 

Stonecypher.

 

Yes, you're correct. QuickBooks automatically exclude the credit card payments on the 1099 NEC form. 

 

What we're going to do is open the payments. Then we'll check the transaction journal to review the associated expense account. However, if the account assigned is correct, I'd recommend reaching out to our Phone Support team. 

 

We have agents there that can do a screen-share with you and investigate this further. Here's how:

 

  1. From the ? Help button, click Contact Us.
  2. Enter,  The credit card payments are shown in the 1099 NEC form.
  3. Click Continue.
  4. You can choose either to Send a messageSchedule appointment, or Get a callback.

 

 

Let me know if there's anything that I can help. Keep safe!

Stonecypher
Level 2

Credit card payments are showing up on my 1099 NEC forms

I've checked what expense account all the 1099 vendor transactions are in. They are all in an expense account that I set up last year called "contractors." All payments to our contractors, regardless of how they were paid,  were put in that expense account. All the transactions to contractors that were made via our debit card were marked as being paid by credit card in the payment method dropdown box on each transaction page. I've already done a live chat (which was difficult to get started because the system to start a live chat is circular. I requested the live chat, entered the issue in the box asking what I wanted to talk about, got a message that said someone would be with me shortly, clicked on the "ok" button below the message, and then it took me right back to the beginning asking if I wanted to a live chat or to send an email, over, and over, and over.) When I finally got it going, I was on that chat for a long time. I did a screen share, so the person helping could see my screen. His conclusion was that I should just leave it and let the debit card payments show up on the NEC and not worry about it. I don't think that is the right answer. Unless this is a glitch in the system that QB is going to fix, I don't see another way forward at this point other than making another vendor for that same person like I said above. 

MariaSoledadG
QuickBooks Team

Credit card payments are showing up on my 1099 NEC forms

Let me share some information about the card payments that will show on the forms, Stonecypher.

 

Debit card payments shouldn't show up on your 1099-NEC form. The IRS requires that certain contractor payments should not be included on the 1099-MISC and 1099-NEC form and are instead reported on the 1099-K form.

 

You'll want to review the IRS instructions for Form 1099-K and the IRS Third Party Reporting Information Center.

 

In addition, payments to 1099 vendors made via credit card, debit card, or third party system are excluded from the 1099-MISC and 1099-NEC calculations. This is because the financial institution reports these payments, so you don't have to.

 

You can run the Excluded Payments by Vendor report to verify excluded payments. To do this, you can follow the steps below:

  1. Select Expenses, then Vendors.
  2. Select Prepare 1099s.
  3. Go to the Preview 1099 and 1096 Information section and note the column titled Total 1099 Payments Excluded. You can select the total in this column to see an Excluded Payments by Vendor report, which shows transaction details. This will help you verify if payments should indeed be excluded.

However, if it still shows up on your 1099 NEC form, I recommend contacting our phone support team to investigate this further. They have the tools to securely pull up your account.

 

You'll want to browse these helpful articles in case you want to know more information about QuickBooks Onlne Payroll.

 

Feel free to let us know if you have other questions with your 1099 NEC form. Remember, I'll always be here in case you need further assistance.

1099jlh
Level 1

Credit card payments are showing up on my 1099 NEC forms

Hi,

I am having the same challenge as Stonecypher.  This is the third year I have done 1099s through online Quickbooks.  The last two years, credit card payments did not show up in the dollar amount for the 1099.  This year, the do show up.  I have double checked the GL accounts, payment methods on the transactions and logged out and back into Quickbooks.  No luck.

 

I imagine other Quickbook users are having similar experiences.  Is the only option to call support?

 

Thanks.

Jena

Adrian_A
Moderator

Credit card payments are showing up on my 1099 NEC forms

It isn't the kind of experience that we want you to have, Jena.

 

I appreciate your time for reviewing General Ledger and for the troubleshooting steps you've made.

 

When the steps recommended didn't work on our customer's end, we let them reach out to our Phone Support. Hence, our agents have special tools to do a screen-share with you and investigate this issue further.

 

Feel free to bookmark these links when preparing 1099s:

 

 

Feel free to mention my name if there's anything that I can help with. Keep safe!

BookkeepingSylvia
Level 1

Credit card payments are showing up on my 1099 NEC forms

I was having the same issue, and discovered by accident that if you put "Debit" in the Ref no. box on the expense, it will exclude that transaction.  It does not work if you put "Debit Card" or "Card Payment" - has to just be Debit.

Stonecypher
Level 2

Credit card payments are showing up on my 1099 NEC forms

Holy Cow! I tried that and it worked! How very weird. Thanks for the tip!

1099jlh
Level 1

Credit card payments are showing up on my 1099 NEC forms

Thanks so much.  That worked for me as well.

 

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