Updates to 1099 reporting in Microsoft Dynamics 365 Business Central

Year-end 1099 reporting is often time-consuming and highly manual, especially for organizations managing large volumes of vendor payments. Recent updates to Microsoft Dynamics 365 Business Central introduce new capabilities that simplify how US organizations prepare, submit, and manage IRS 1099 forms electronically.

Building on recent improvements to 1099 reporting, Business Central now includes additional features that support electronic 1099 submissions through API integrations, reducing reliance on paper forms and manual uploads.

IRS 1099 forms are used in the United States to report income that is not paid as wages, salaries, or tips. They help the IRS track payments made to individuals and entities outside of traditional payroll.

Businesses and individuals are required to file 1099 forms when they make certain types of payments, such as compensation to independent contractors, interest income, dividends, or other miscellaneous income. Filing errors or missed deadlines can result in penalties and additional follow-up work after tax season.

Business Central supports several common IRS 1099 form types, including:

• 1099-MISC, used for miscellaneous income such as rents, royalties, prizes, awards, and other reportable payments
• 1099-NEC, used for payments made to nonemployees and independent contractors for services
• 1099-INT, used for reporting interest income
• 1099-DIV, used for reporting dividend income

Rather than relying on preprinted IRS forms, Business Central manages 1099 data digitally and supports electronic submission along with plain-paper vendor copies.

Microsoft Dynamics 365 Business Central has supported 1099 reporting for many years, including tracking reportable vendor payments and generating 1099 forms from within the system. In the 2024 release wave 1, Microsoft modernized this experience by introducing plain-paper substitute forms, reducing reliance on preprinted IRS forms and simplifying printing and distribution for finance teams.

In the Business Central 2025 release wave 2, Microsoft expanded these capabilities with API-based integrations that support electronic submission of 1099 forms. Business Central can now submit IRS 1099 forms electronically through integration with the IRIS platform, the IRS system for information returns. This update reinforces the shift away from preprinted IRS forms and manual uploads, replacing them with a fully digital submission process and plain-paper substitute forms for vendors.

With the IRIS integration, organizations submit 1099 forms using existing vendor and transaction data already maintained in Business Central. Submission acknowledgements and filing status are available through the IRIS Transmission page, giving finance teams visibility into progress without leaving the ERP. Overall, this reduces system handoffs, lowers the risk of errors, and makes year-end 1099 reporting more controlled and efficient.

The IRIS integration delivers immediate, practical benefits during year-end 1099 reporting. By submitting forms electronically directly from Microsoft Dynamics 365 Business Central, organizations reduce manual work, improve data consistency, and gain better control over the filing process while staying aligned with IRS requirements.

• Eliminates manual data entry and duplicate uploads, reducing administrative effort and filing costs
• Improves data accuracy by submitting forms directly from Business Central
• Speeds up submission, validation, and IRS acknowledgement timelines
• Provides earlier visibility into filing issues through status tracking
• Creates a more predictable and controlled 1099 reporting workflow

Microsoft Dynamics 365 Business Central supports electronic 1099 reporting for common IRS forms used to report non-wage income, including payments to nonemployees and independent contractors, as well as interest and dividend income. These forms are submitted electronically rather than printed on pre-approved IRS paper, allowing organizations to manage 1099 reporting entirely within the ERP.

Instead of generating preprinted original forms, Business Central submits 1099 data through its IRS integration and provides Copy B to vendors as substitute forms printed on plain paper. This approach reduces dependence on physical forms and mailing logistics while remaining aligned with IRS requirements.

Business Central also includes the IRIS Transmission page, which gives finance teams visibility into the status of submitted 1099 forms. Teams can see whether filings are pending, accepted, or rejected directly in the system, making it easier to identify and resolve issues before deadlines pass. As a result, organizations reduce follow-up work, avoid last-minute corrections, and maintain better control over the year-end 1099 process.

Electronic 1099 filing through IRIS marks a meaningful step forward in simplifying year-end reporting in Microsoft Dynamics 365 Business Central. If you need help configuring 1099 reporting, enabling IRIS integration, or navigating other Business Central features and updates, contact Rand Group today. Our team works with organizations across industries to support Business Central implementations, ongoing optimization, and long-term support—so you can stay current, compliant, and focused on running the business.