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Objective
This document will explain what a pass through credit is, how calculate the credit(s) and how the credit(s) is reported on the 1099-PATR form.
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The system doesn't make a transaction for the pass through credits so it is important to keep a copy of the report that is generated. This will be important if you have to reprint a 1099 for a patron for a prior year. The system does holds the information until the option to Clear All Totals is performed.
For this discussion we will look at Alternative Minimum Tax and Qualified Production Activities. The pass through credits can be calculated by the system or imported. First we will discuss how the system calculates the credit.
Before allocating any pass through credits be sure and clear all totals. This only needs to be done once per 1099 reporting period. To do this go to Patronage and select 1099 Reporting and then select the menu option Pass Through Credits. The following screen will appear.
Select Option 1 – Clear All Totals.
Then Select the menu option to wipe that total out.
Illustration 1
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Qualified Production Activities Amount To Allocate – Type the amount of the credit to be allocated to the patrons.
Calculation Option – Option 1 will calculate the credit based on refund dollars, whereas Option 2 will calculate based on activity.
Transaction/Activity Date – If using Option 1, enter the date range of the refund to be used to calculate the credit. If using Option 2, enter the date range of the activity that is to be used to calculate the credit.
Click OK.
If you are using Option1, at this point the credit will be calculated
With Option 2 there are additional parameters to enter.
Because the allocation is based on activity you will need to enter the parameters that you use to specify who is eligible to participate in a patronage refund.
After clicking OK, additional fields will appear, see Illustration 5 on the next page.
Purchase/Sales – Enter a P, beginning and ending
Accounting Type – The options are 2 – 4. Enter the accounting type that is designated on the commodity patronage code
Product Code – Enter the range of the commodity patronage codes for which the credit is to use in the calculation.
Location Code – Enter a location range if there is activity in a direct ship location that they do not want to allocate on.
Proration Option – Enter 1 – Quantity Based or enter 2 for Amount Based.
Click OK, the credit will now be calculated.
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Illustration 5
Below is an example of the Qualified Production Activities report
Illustration 6
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If the necessity arises, there is a way to correct or re-enter a pass through credit for a patron. To do this go to Account Balance Inquiry, select the patron you wish to make a change to. The following screen will appear. To make the change click the Edit button which will open up the fields to be edited. See Illustration 8 on the next page.
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Illustration 8
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