Thanks for this question StephenC I've asked Sage 50 US's expert services team to advise. Will update you as soon as possible.

Warm Regards,
Erzsi

Hi StephenC - 

The Aatrix 1099s have (and will) pull any payments made to GL accounts that are marked to go to 1099 boxes (this was the case in the previous 1099 Aatrix integrations as well).  The integration change in Sage 50 US 2020.1 was intended to simplify the data import process for Aatrix 1099s, which previously required manual formatting and matching of import files.  None of the core functionality was changed as part of the integration updates.

While you can filter by payment type when using the Sage 50 1099s there is no option for this in Aatrix, thus the CC payments should be put to a GL account that does not pass information to the 1099 preparer (by setting the GL account to “None” in the 1099 vendor defaults).  Otherwise the amounts would have to be manually edited to remove the CC payment amounts on the Aatrix 1099 preparer prior to the final print.

Thanks!

Yes, I know that. The problem is that it needs to filter by payment type. If you go to Reports & Forms > Forms > Tax Forms > Form 1099-MISC Preprinted, you will see that this method (the old method that I was referring to) allows you to filter by payment method. This filter was added somewhere around 2014 (I don't remember exactly when) for compliance reasons. This was because when 1099-K was introduced credit card payments were supposed to be excluded from 1099-MISC. But now Sage seems to be ignoring this requirement. I can promise you that other competing products to do not ignore this requirement.

"thus the CC payments should be put to a GL account that does not pass information to the 1099 preparer (by setting the GL account to “None” in the 1099 vendor defaults)" is not a viable option. When entering an invoice it may not even be known yet if it will be paid by check or credit card. And even it it was always known, your solution is to create two of every expense account, one 1099 and one non-1099?

Prior to 2020.1 there was no 1099 integration with Aatrix. Launching their 1099 app and then popping up a message saying your responsible for enter the data yourself does not count as integration by most people's standards.

It seems to me that this would require either duplicate GL accounts (as mentioned by someone else already), or manually entering the 1099-MISC information for every vendor (especially those vendors that were paid by both check and credit/debit card). In my opinion, this is not integration, and it does not save time. It takes more time, either in entering the original data, or to create the 1099-MISC forms. Either way, it is much less efficient than it needs to be. There has to be a way for Aatrix to determine the payment type when pulling the 1099-MISC data. Other software that I use (for some clients) easily separates out the cash/check payments from the credit/debit card payments, and only reports the cash/check payments on the 1099-MISC.

To me, the worst part is that Sage promotes compliance as one of the reasons to use Sage 50 and of course it's always been one of the reasons given for the need to switch to a subscription model. But if users follow the new wizard they will end up with 1099s that do not follow IRS regulations. Meanwhile Sage's only response to this question has no explanation for why they ignored this requirement when creating the Aatrix integration, or what their plan is to make it compliant.

Good Afternoon - 

We are currently working with our forms development partner Aatrix to incorporate additional filtering options to the payroll tax form selector in a future update.  In the meantime, if 1099 vendors have been paid with credit card or electronic payments it is recommended to leverage the existing 1099-MISC & 1099-INT preprint options available via the Reports & Forms menu.