What is changing with 1099's in Business Central?

Microsoft continues to invest in Business Central’s 1099 module so as to satisfy current IRS and end-user requirements as well as facilitating easier implementation of future IRS changes. On v25 and 26 of Business Central, updated 1099 functionality was available on an opt-in basis. On v27, new 1099 functionality will become mandatory. With v27, Business Central is now an approved application by the IRS for submitting 1099 filings electronically using the IRIS system. 

Why is Microsoft changing the 1099 system?

The current 1099 functionality requires code updates when the filing requirements and 1099 form layouts change. Microsoft is now moving to a setup driven functionality. This new functionality was developed based on feedback from Microsoft MVP's in the US market with a focus on streamlined updating and usability. Additionally, this new functionality enables emailing of 1099's to recipients. 

What is changing within Business Central?

The existing 1099 fields on the vendor card will be replaced by new IRS setup tables with lookup fields to the vendor card.

What is the IRIS system?

The IRIS system was developed by the IRS when the filing threshold was reduced to 10 documents and to replace the existing e-filing system, FIRE.

To use IRIS, filers must register for a Transmitter Control Code with the IRS. More information on IRIS and TCC can be found here: https://www.irs.gov/filing/e-file-information-returns-with-iris 

Must I file electronically with IRIS?

The IRS implemented mandatory filing for information returns, of which 1099 is included, in 2023 for filings that would include 10 or more returns. Filing using Business Central's IRIS integration is NOT mandatory—you can continue using any third-party services that you are happy with, as long as you file electronically if required. 

How do I opt in to the functionality on v26?

The new 1099 functionality can be enabled by opening the Feature Management screen in Business Central and locating Feature Update: Enable using 1099 forms to transmit the tax data to the IRS in the United States in the list. Update the Enabled For field from None to All Users.

When the updated functionality is enabled, there is a data conversion process which will run to assist with migrating existing 1099 data to the new tables and fields.  

What if I don't want to use the new functionality?

The new functionality will replace the legacy functionality in v27. An organization on v26 can remain on this version until February 28, 2026. You can reschedule updates in the Business Central Admin Center.

How is Cargas helping customers absorb this change?

We're here to help! The goal of this article is to provide immediate awareness of the change. Coming soon we will be providing step by step instructions to implement the data conversion steps and providing a webinar to cover the changes. Help will be available through the helpdesk.

What do I need to do now?

• If you have not been updated to v27, postpone your upgrade in the Business Central Admin Center to allow you to run the data conversion at your convenience. 
  • If you have already been upgraded, Cargas will provide additional instructions for data conversion.
• Review the instructions Cargas provides.
• Attend the Cargas webinar.
• Begin planning now and plan to file in mid-January. Support may be constrained between January 28-31, 2026.
• If you require assistance, please open a support ticket using the portal at helpdesk.cargas.com or emailing [e-mail].