Missing Contractors and Wrong 1099s Amounts in QuickBooks

When preparing 1099s in QuickBooks, users may notice that certain contractors are missing from the list or their payment amounts appear incorrect. This issue often occurs due to inactive vendor profiles, missing 1099 tracking settings, unmapped expense accounts, or payments that do not meet the minimum IRS threshold. Additionally, payments made via credit cards or third-party apps like PayPal are excluded by QuickBooks, as those are reported by the payment processor.

Before fixing the issue, it’s important to ensure that all contractors are properly set up with valid tax IDs, marked eligible for 1099, and paid from mapped accounts. Early signs include contractors missing from reports, incorrect totals in the 1099 Summary, or vendors being inactive. Running reports like the Vendor Contact List, Transaction List by Vendor, and checking 1099 thresholds are key steps to identify this error early. Check out these 3 proven solutions to fix ‘Missing Contractors or Wrong Amounts’ in QuickBooks for 1099s.

Step 1: Make Sure the Contractor is Active and Set Up for 1099 Tracking

A contractor may not show up because they are either inactive or not marked as eligible for 1099 reporting. Here are the steps to mark contractor as active and set it up for 1099 tracking:

For QuickBooks Online / Contractor Payments (with QBO)

1. Open the Review Your Contractor’s Info screen while preparing 1099s.
2. Click Add from Vendor list and select the correct vendor.
3. Run a report to check tracking settings:
   • Go to Reports.
   • Search for Vendor Contact List and open it.
   • Click Customize > Change columns > check Track 1099.
   • In Filters, choose Deleted and set the ▼ dropdown to All.
   • Click Run Report.
4. Select Sort by the Track 1099 column to find contractors not being tracked.
5. For missing vendors:
   • Click the vendor’s name > Make Active.
   • Go to Vendor Details > click Edit.
   • Check Track payments for 1099 > click Save.
6. You can also update vendor settings, change their 1099 status:
   • Go to Get paid & pay > select Vendors.
   • Choose a contractor > click Edit.
   • Check Track payments for 1099 > click Save.
7. If the vendor is not visible:
   • Click Settings (above Action column).
   • Enable Include inactive checkbox.
   • Find the missing vendor and click Make active.

For QuickBooks Contractor Payments without QuickBooks Online

1. Go to Contractors.
2. From the Active ▼ dropdown, choose Inactive.
3. Locate the Inacitve contractor and click Mark as active.

For QuickBooks Desktop

1. Go to Reports > Vendors & Payables > 1099 Summary.
2. Set the 1099 options dropdown menu to All Vendors.
3. If a vendor is missing, make them a 1099 Vendor.
   • Go to Vendor Center from the Vendors menu.
   • Double-click their name > open the Tax Settings tab.
   • Check Vendor eligible for 1099.
   • Enter the Vendor’s tax ID in the Vendor Tax ID field.
   • Uncheck Vendor is Inactive if needed.
   • Click OK.
4. Reopen the 1099 Summary report and select 1099 Vendors from the options dropdown.

Step 2: Check if the Contractor Was Paid Enough to Meet the 1099 Threshold

1099 forms are only issued to contractors paid $600 or more in the year. Payments made via credit card or third-party apps aren’t counted by QuickBooks; they are reported by the payment processor. Here are the steps to verify whether or not the contractor was paid as per the 1900 Threshold.

For QuickBooks Online / Contractor Payments (with QBO)

1. Go to Payroll > Contractors or Get paid and pay > Vendors.
2. Click Prepare 1099s > Continue.
3. On the Check that the payments add up screen:
   • Click the arrow next to the filter icon.
   • Change contractor type to 1099 Contractors below the threshold.
   • Review the list.

For QuickBooks Desktop

1. Go to Reports > Vendors & Payables > 1099 Summary.
2. From the 1099 options dropdown, choose Ignore thresholds.
3. If the vendor appears, it means they haven’t met the $600 limit.
4. To review or adjust threshold settings:
   • Go to Edit > Preferences.
   • Select Tax:1099 from the left pane.
   • Choose the Company Preferences tab.
   • Click the button next to the message about mapping accounts.
   • In the 1099 wizard, click the Show IRS 1099-MISC filing thresholds link.
   • Double-click the value under the Thresholds column for the correct box.
   • If needed, click Reset to IRS Thresholds to correct them.
   • Click Save, then Close.

Step 3: Make Sure Contractor Payments Were Made from the Correct Expense Accounts

QuickBooks only includes contractor payments in 1099 forms if they were made from accounts that are mapped to a 1099 category. Check out these steps to ensure contractor payments have been paid from the correct expense account.

For QuickBooks Online / Contractor Payments (with QBO)

1. Go to Reports.
2. Search for Transaction List by Vendor.
3. Click Customize.
4. Set the Report Period to Last Year.
5. Under Rows/Columns, click Change columns > check Split.
6. In the Filter section, check Vendor and choose the 1099 vendor(s).
7. Click Run Report.
8. Look under the Splits column to find which accounts were used.
9. Click the transaction to see account details. For bills, check which expense account was applied.

For Contractor Payments without QuickBooks Online

1. Go to Contractors > View all contractor payments.
2. Open each payment and review the Category used.
3. This account must be mapped for 1099 reporting.

For QuickBooks Desktop

1. Go to Reports > Vendors & Payables > 1099 Summary.
2. Select All allowed accounts from the 1099 options dropdown.
3. Find the contractor and double-click the total amount to open 1099 Detail report.
4. Review the Account column to see which accounts were used.
5. To map these accounts to 1099:
   • Click Edit > Preferences.
   • Choose Tax:1099 from the left menu.
   • Go to the Company Preferences tab.
   • Click the link to Map accounts to 1099 boxes.
   • Select the correct 1099 box for each account from the dropdown list.
   • After mapping, close the report.
   • Use the 1099 options dropdown again and select Only 1099 accounts to verify.

What are the Prerequisites to Fix ‘Missing Contractors or Wrong Amounts’ in QuickBooks for 1099s?

Follow these tips before you start fixing this error:

• Ensure you have access to either QuickBooks Online, Contractor Payments, or QuickBooks Desktop.
• Make sure all vendors and contractors have been added to your QuickBooks account.
• Contractors must have a valid Tax ID and be marked as eligible for 1099.
• Confirm that the contractor is active in the system.
• Payments made to contractors should be from 1099-mapped expense accounts.
• All 1099 vendors must have been paid more than $600 during the tax year (excluding card payments).
• Check that your QuickBooks preferences are set to use the IRS 1099 thresholds.
• Have the Vendor Contact List, 1099 Summary, and Transaction List by Vendor reports accessible for review.

How to Prevent ‘Missing Contractors or Wrong Amounts’ in QuickBooks For 1099s?

Follow these tips to avoid encountering this error in the future:

• Always check the Track payments for 1099 box when adding new contractors.
• Confirm vendors are set as active before preparing 1099s.
• Use 1099-mapped expense accounts for all eligible contractor payments.
• Review payments regularly using the Transaction List by Vendor report.
• Verify account mapping using the Map Accounts tool in QuickBooks preferences.
• Maintain up-to-date IRS 1099 thresholds in your settings.
• Avoid using credit card payments if you want the amount to show on your company’s 1099s.
• Run and review 1099 Summary and Vendor Contact List reports before filing.

When Should You Seek Professional Help for ‘Missing Contractors or Wrong Amounts’ in QuickBooks for 1099s?

Reach out for professional help if you can’t locate a contractor, your 1099 totals seem off, or you’re unsure how to fix mapping or threshold issues. It’s also a good idea to get support if you’re short on time or new to QuickBooks. Professionals can quickly pinpoint and fix the problem, ensuring your 1099s are filed correctly and on time without added stress.

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