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Administrator Guide
Last Updated: 2025-02-07
Setup Considerations: Combined Federal/State Filing Program

Setup Considerations: Combined Federal/State Filing Program

You can use this topic to help make decisions when planning your configuration and use of the Combined Federal/State Filing (CF/SF) Program in Workday. It explains:
  • Why to set it up.
  • How it fits into the rest of Workday.
  • Downstream impacts and cross-product interactions.
  • Security requirements and business process configurations.
  • Questions and limitations to consider before implementation.
Refer to detailed task instructions for full configuration details.

What It Is

You can generate electronic 1099 returns that meet the IRS CF/SF Program requirements.

Business Benefits

The CF/SF Program eliminates the need to report your 1099 federal and state returns separately, simplifying your annual 1099 processing.

Use Cases

You report 1099 payments to state tax authorities. You've already obtained IRS approval to participate in the CF/SF Program. You opt in to the CF/SF Program in Workday and select the participating states to which you report. You file:
  • A combined return to the IRS, which includes the payments reportable to the participating states.
  • A return to each of the nonparticipating states.

Questions to Consider

Questions
Considerations
To which states do you submit your 1099 returns?
When you opt in to the CF/SF Program in Workday, you can select the states to include in your combined returns.
For Workday to include payments in combined returns, you must use state withholding tax rates. When you don't withhold tax, you can set up a zero-percent tax rate. As a result, for each state that you include in your combined returns, you need to set up a:
  • Tax authority.
  • Withholding tax rate with a realization point of invoice.
  • Withholding tax code that you use on the 1099 payments.
Then, map your state tax authorities to 1099 state withholding.
Also add the state tax IDs in the tax details of your companies that file combined returns.
How do you pay your 1099 payees?
Workday supports withholding tax codes on supplier invoices only. For Workday to include ad hoc payments in combined returns, create 1099 adjustments.

Recommendations

When you opt in to the CF/SF Program midyear, you might have 1099 payments with tax rates that you haven't mapped to the state tax authority. To include these amounts in your combined returns, we recommend that you create 1099 adjustments with:
  • Spend categories that you've mapped to IRS boxes.
  • The state income and state tax withheld amounts.
We also recommend that you add default withholding tax codes to your 1099 suppliers. Default withholding tax codes make data entry easier and help ensure that Workday includes all 1099 payments in your combined returns.
We recommend that you configure withholding tax rates with a realization point of invoice, as this enables you to:
  • Process supplier refunds without the need for adjustments.
  • Override tax amounts on supplier invoices.
To process supplier refunds when you configure withholding tax rates with a realization point of payment, you can:
  • Access the
    Supplier Invoice Adjustment
    Change
    task from the related actions menu on supplier invoice adjustments to remove the withholding tax code.
  • Record supplier refunds against supplier invoice adjustments.
  • Create 1099 adjustments for state taxable amounts. You don’t need to adjust federal amounts.

Requirements

  • Obtain IRS approval to participate in the CF/SF Program.
  • Verify if your state has additional filing requirements.
  • Set up 1099 Reporting for all the states that you include in your combined returns.
  • For Workday to include a payment for a given state, the payment must contain tax rates that you've mapped to the state tax authority.

Limitations

No impact.

Tenant Setup

No impact.

Security

Users with access on both of these domains can opt in to the CF/SF Program and select participating states:
  • Set Up: Tax
     in the Common Financial Management functional area.
  • Reports: Supplier Accounts 1099 - USA
     in the Supplier Accounts functional area.

Business Processes

No impact.

Reporting

No impact.

Integrations

Web Services
Considerations
Put Company Tax Details
Enables you to:
  • Opt in to participate in the CF/SF Program.
  • Select the states to include in your combined returns.
  • Add your state tax identifiers.
Put Tax Authority
Uploads tax authorities for states that you include in your combined returns.
Put Withholding Tax Code
Uploads withholding tax codes for states that you include in your combined returns.
Put Withholding Tax Rate
Uploads withholding tax rates for states that you include in your combined returns.
Submit 1099 Adjustment
Enables you to update your 1099 federal and state amounts by payee.

Connections and Touchpoints

Workday offers a Touchpoints Kit with resources to help you understand configuration relationships in your tenant. Learn more about the Workday Touchpoints Kit on Workday Community.