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Anonymous
November 22, 2022
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Scholarship disbursement to a third party (travel agent) and 1099s for scholarship recipients

  • November 22, 2022
  • 2 replies
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I am running into a problem creating 1099s for our scholarship recipients. This year we have a large amount of scholarship disbursement for an international trip. The scholarship payments go to a travel agent directly instead of paying to scholarship recipients. In QBO, I have entered all scholarship recipients' W-9, but I cannot generate 1099s for them because, in QBO, they don't receive any payment from us.  What should I do to solve this issue? Thanks. 

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I am not sure the my solution is the correct answer, but at least it enables me to generate 1099-MISC. It involves entering Journal Entries:


Step #1: In Journal Entry #1, enter Account <Expenditures: Awards and Grants to Others> with $$ in Debits and the scholarship recipient's name.
Step #2: In Journal Entry #1, enter Account <Account Payable A/P> with $$ in Credits with the scholarship recipient's name.
After paying the travel agent and recording the check payment under <Expenditures: Travel>:
Step #3: In Journal Entry #2, enter Account <Account Payable A/P> with $$ in Debits with the scholarship recipient's name.
Step #4:  In Journal Entry #2, enter Account <Expenditures: Travel> with $$ in Credits.

 

Please let me know if I am doing it correctly. 

 

2 replies

J
JonpriL
November 22, 2022

Hello @2051886, I'll share details about your 1099 forms. 

 

1099 payments for contractors made with credit cards, debit cards, and third-party payment account systems will not be reported when you prepare your forms. These type of payments is reported on 1099-K forms and your financial institution or the company is responsible for filling them.

 

Here's an article to read and learn more about the payments reported on your forms: Understand which Payments are Excluded from a 1099-NEC and 1099-MISC.

 

I'm adding this reference for tips and the important dates to remember in preparation for the coming year-end: Complete Certain Tasks in QuickBooks Online Payroll to Prepare for the New Fiscal or Calendar Year.

 

Let me know in the comments below if you've got questions about 1099 payments and forms. I'll surely be around ready to lend a hand. Take care always!

A
Anonymous
Answer
November 23, 2022

I am not sure the my solution is the correct answer, but at least it enables me to generate 1099-MISC. It involves entering Journal Entries:


Step #1: In Journal Entry #1, enter Account <Expenditures: Awards and Grants to Others> with $$ in Debits and the scholarship recipient's name.
Step #2: In Journal Entry #1, enter Account <Account Payable A/P> with $$ in Credits with the scholarship recipient's name.
After paying the travel agent and recording the check payment under <Expenditures: Travel>:
Step #3: In Journal Entry #2, enter Account <Account Payable A/P> with $$ in Debits with the scholarship recipient's name.
Step #4:  In Journal Entry #2, enter Account <Expenditures: Travel> with $$ in Credits.

 

Please let me know if I am doing it correctly. 

 

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