How to Use and Setup the New 1099 Filing Features in Microsoft Dynamics 365 Business Central- a Detailed Guide

Below is our step-by-step guide to using the new 1099 features for Dynamics 365 Business Central (BC) released in version 27 or available in previous versions under feature management.

If you have any questions or comments, email our sales team to find out how A BC Consulting Group can provide you with the best of support for Dynamics 365 Business Central at sales@abccgroup.com or visit our website at: https://www.abccgroup.com/.

Step One:

Register with the IRS for the IRIS-TCC Control program. You can do this by visiting this link.

You will need an ID.me Login with the IRS and then you will associate your personal ID with the organization you are working for/with.

Make sure to select the transmission mode A2A when applying for an account for your organization.

Step Two:

Navigate to the new window below (v27): IRS Forms Setup

Click on Setup IRIS User ID

Follow these steps below as guided by Microsoft online via the IRS. You will need to get the user ID from the IRS portal to paste into Business Central.

To get IRIS User ID: 1. Copy IRIS API Client ID to clipboard

2. Login to IRS Consent App: https://la.www4.irs.gov/esrv/consent/

 3. Select Setup on the API Authorization Management page

4. Enter IRIS API Client ID on the A2A Authorization page, grant access to PROD

5. Grant access to TEST if you also want to test sending 1099 forms on sandbox.

6. Copy your Full IRIS User ID from the A2A Setup Complete page. Example of User ID: "dasmith-345870".

7. Paste it to the IRIS User ID field on this page.

Click on Close Once Done.

Step Three:

Mask and protect your vendors EIN and Social Security Numbers. This can be done through the Protect TIN drop-down menu on the IRS Forms Setup page. We highly recommend this option below which will protect your vendors’ federal ID in the email attachments generated from BC.

Enter your Business Name Control in the window as well. See below for details on your name control.

Q1. What is a name control?

A1. A name control is a sequence of characters derived from a taxpayer’s name that is used by IRS in processing the tax return filed by the taxpayer. It is important that the combination of name control and taxpayer identification number (TIN) provided on an electronically filed return match IRS’s record of name controls and TINs.

A name control is established by the IRS when the taxpayer requests an Employer Identification Number (EIN). The IRS creates the name control from the legal name listed on the Form SS-4, Application for Employer Identification Number.

When a return or extension is filed, the IRS checks whether a name/TIN combination is correct by matching it against a file containing all employer identification numbers (EIN) issued by IRS.

The name control listed on the return/extension is then compared to the name control on the IRS file. If it matches the name control in our records, it is considered to be correct.

Q2. Why is the name control important?

A2. In e-file, a taxpayer’s Employer Identification Number (EIN) and name control in the Return Header must match the data in the IRS e-file database. If the EIN and name control do not match at the parent (consolidated) level, the e-filed return will reject.

Step Four:

Verify the email message and Body you want to use in the emails to your vendors for their 1099s.

When the window opens, click on show more for both sections:

It will open up the email body and message that you can edit. Once you are done, click Ok at the bottom or click cancel to leave the window and not save your changes.

Step Five:

Review the new 1099 vendor fields and update them as needed. If you switched from Business Central version 26 to 27, these new fields appear automatically, and your vendors were transitioned to the new fields. Microsoft filled in the fields for you, except those authorizing you to send 1099s electronically.

Note, you should send an email to your vendors asking if they want their 1099 remitted electronically. This is not mandatory but for your vendors that do not want their 1099 emailed, this is critical. You will enable the consent for vendors that do want to receive this electronically. Note: the 1099 email address field does not populate from the vendor contact information card, so if the vendor requests a different email address field to be removed you can copy it here or update it with the current vendor on file. I recommend using edit in excel to copy the vendor email address field over to this field.

Step Six:

Review vendors that do not have 1099 codes to verify they are not 1099 vendors.

I recommend running the vendor list for any vendors without 1099 code information to see if they need to be updated.  This is the easiest way to filter on that list:

You can also just export your vendors with the share button and click Edit in Excel. This editable list will include the 1099 fields so you can easily make changes and publish them back.

To add 1099 codes to a vendor you must click on the IRS 1099 Form Box No field. A current reporting period must exist for the current year to add a vendor to the year.

To add a reporting period, navigate to IRS Reporting Periods.

If you migrated during the 26 to 27 upgrades, you would already see 2025 as a reporting period.

Choose either new (if no reporting periods exist) or copy setup (if 2025 already exists):

Note: You can copy setups for all companies from this window to save time if you have multiple companies.

When you are done, the setup window will look like this:

To see the list of supported forms per tax year, click on the forms in the period or click on forms at the top. This will show you all the codes supported by BC.

Step Seven:

Add missing vendors to the appropriate 1099 tax years, forms and form boxes. This can no longer be done on the vendor card and needs to be done on the IRS 1099 Vendor Form Box Setup.

To mass add vendors, click on the suggest box:

You can add filters to bring in only the vendors you want or leave blank to bring in all vendors.

I would suggest a filter like the above to bring in all vendors with a TAX ID.  Using the filter above.

Then use the edit in Excel button to mass update the years, forms and 1099 codes and publish back to Business Central. You could also use a configuration package.

Step Eight:

Review and edit any vendor 1099 transactions and make changes as needed. You can easily do this using the new report: IRS 1099 Vendor Overview. This interactive report allows you to export and open in Excel or click on any vendor line and drill into their transactions.

If you click on a vendor amount, this will take you to the calculated and filtered vendor ledger entries page for that vendor.

To change the vendors 1099 amount, form or form box in the vendor ledger entries, click on edit list at the top of the page. Then scroll over to the far right until you see the fields below.

These four fields can be edited from the vendor ledger entries page that is already filtered or you can navigate to vendor ledger entries inside of BC and edit in mass from there.

Once you are done, exit vendor ledger entries and the amounts will update.

Step Nine:

Once you have done all your reviews, you are ready to email and print your 1099 forms for your vendors.

You will navigate to this new window, IRS 1099 Form Documents:

Click on create forms.

Add filters to this window to create only certain forms or click on okay to add any new 1099 forms for any code/vendor combination.

When you are done, your forms will populate in the window below.

You can drill into any line to see more details about that vendor 1099 and 1099 preferences.

You must release all the forms in order to email and print them. You can do this from the 3 dots on the main navigation menu located under actions and then select release all.

Note:

To make edits to them all after they have been released, you would need to reopen all.

This will update the status on the list.

Once the forms are done, you can select print to see what the forms look like before emailing or printing them. Choose print from the navigation menu:

Choose what copy to print. Then select print.

Choose preview to review the forms.

If you want printed copies, you can print them at this time.

Email 1099s:

To send email copies to your vendors, select the email option at the top of the window. Choose what copy to email to your vendors. Click Ok.

Note: BC uses the current user mailbox or the default setup email address to send these forms. There is no email scenarios available yet for these forms. When you click OK, there is no further step to stopping the process, and the emails will be sent.

If you have made no further changes to the email messages located in the previous steps, your email will look like this. The 1099 form will come as a PDF attachment to the vendor.

Step Ten:

Submit your IRIS transmissions to the IRS. I would wait a couple days for vendor corrections before submitting the file, if you can.

From the IRS 1099 Form Documents, Select IRIS transmissions.

From the IRS transmissions window, click on Create IRIS Transmission.

Select your reporting period and then click on OK.

This note will appear, click yes.

The transmission will then be ready to go. You can click into it to view the details:

When you are ready to submit it to the IRS, you will click send.

Accept the Microsoft terms for privacy and cookies.

The file will be electronically sent to the IRS and then accepted or rejected. You can keep resending from this window and BC will keep the transmission history in this window for audit purposes.

If the IRS has any issues with transmitting, BC will produce an error log, and you will need to go fix the errors and resubmit.

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