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When using Aatrix' eFile solution for the 1099 process, we perform basic error checking in the Preparer. Aatrix does this to ensure that the filing has the correct 1099 information to avoid a rejection by the IRS. Below are some of the basic error checks that will be performed.
- Verifying Recipient Information
Upon entering the Preparer, the first step is to verify Recipients' names. Pay special attention to Recipient information to avoid sending Recipient copies out with incorrect information (i.e. name change) and then being required to send a corrected 1099 copy to those Recipients.
There are also several error checks being placed on all Recipient information.
- Invalid Social Security Numbers and Taxpayer Identification Number
If an error is detected on any Recipients' Taxpayer Identification Number, an error dialog will appear.
All cells with identified errors will be highlighted in red and must be corrected as they cannot be processed through the 1099 Preparer.
At least 50% of recipients listed in the Preparer must have a valid TIN. A valid TIN would contain all numeric values, in the correct 9 digit format. This error applies to TINs with all 0's (e.g. 00-000000000, 000-00-0000 or blank for 2nd TIN Notice indicator).
Note: The recipient(s) may also be deleted from the filing and processed through alternative means.
- Duplicate SSNs/TINs
Any recipients with the same taxpayer identification number will have the option to combine into one line. It is not required to combine into one line, so the option to keep them separate is available.
Note: When a recipients is listed more than once within the 1099 Preparer, a recipient number is required to uniquely identify the individual 1099 Forms. This is a new specification required by the IRS starting for filing year 2015.
- Recipient Name and Address Verification
If an error is detected on any of your Recipients' names or addresses, the following message will display:
"The following errors occurred with your Recipient information. All cells with identified errors will be highlighted in red; you must correct these errors before continuing”
Note: The address of any foreign recipients will also be checked. Specifically, for Canadian recipients, the Postal Code format will be verified along with the Province code.
- Account Number
The account number is required if you have multiple accounts for a recipient for whom you are filing more than one information return of the same type. The account number may be a checking account number, savings account number, serial number, or any other number you assign to the recipient that is unique and will distinguish the specific account, do not enter a TIN.
One or more of the states require a state account number. Choose the Edit menu then Update Company Information to add the state account number.
If the checkbox for FATCA is selected, then an account number must be present.
- Recipient Wage Amounts
When the 1099 Preparer is verifying recipient wage amounts, there are two types of errors that can occur:
1. Fatal Errors. These types of errors are considered a cause of rejection by the agency and the 1099 Preparer will not continue to the next step without correcting them.
2. Non-Fatal Errors (Warnings). These types of errors are considered warnings and are not a cause of rejection by the IRS, but are not common in 1099 processing. We suggest you look over these errors; however, you are able to continue through the 1099 Preparer without correcting.