Handling upcoming 1099 reporting changes in Dynamics GP

This Knowledge Base article discusses upcoming 1099 filing requirement changes for tax year 2023 and how Dynamics GP can help you meet these new requirements.

What is changing?

For tax year 2023, the IRS is reducing the electronic filing threshold from 250 information returns to 10. The IRS news release can be read here. There are many documents that are classified by the IRS as an information return and in Dynamics GP, these are produced as 1099-NEC, 1099-DIV, 1099-R, and 1099-MISC. The complete list is available on the IRS website.

Furthermore, the threshold is not just established as a single document type, but rather information returns as a whole. An example would be an organization that needs to file six 1099-NEC forms, two 1099-MISC forms, and two 1099-R forms. Since there are a total of 10 information returns, the electronic filing threshold has been met and all information returns must be filed electronically.

This has been a multi-year effort by the IRS to require electronic filing by businesses and the IRS is intentionally casting a wide net. We expect that many of our customers will be captured by this requirement.

What are the options?

Fortunately, there are options available to help meet the new requirement:

1. Use a filing solution integrated to GP, such as Greenshades. Greenshades is a long time Microsoft solution provider and Cargas partner. Our customers have used Greenshades to automate their 1099 filing. Using the data in GP and their native integration, Greenshades will mail the 1099 to the recipient in addition to filing electronically with the government.
2. Use a non-integrated solution. Tax1099.com is a solution that Cargas customers have used, and there are many other such services. Similar to Greenshades, these services typically will mail the 1099 to the recipient and handle the IRS filing. Microsoft has provided SQL scripts to enable data export for use with such solutions.

What are the next steps?

We're here to help! The most important thing is to begin planning now as there will be more electronic filers than in previous years. Please open a ticket at support.cargas.com so that we can discuss the requirements and solutions with you.