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Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 28382
Experience:  Taxes, Immigration, Labor Relations
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In MN we need to withhold a 2% entertainment tax MN

Customer Question

In MN we need to withhold a 2% entertainment tax for non MN residents and then we needs to submit the 1099. We pay a deposit to the entertainer's agent and then the remaining amount directly to the entertainer. Do we put the full amount paid on 1 1099 to the entertainer or do we need to complete 2 1099s, 1 for the agent, and 1 for the entertainer? Also, do we need to submit a 1099 for MN and IRS?
Submitted: 1 year ago.
Category: Tax
Expert:  Lev replied 1 year ago.

For federal tax purposes...

On 1099misc form - you report the full amount BEFORE any withholding.
You would need to send form 1099MISC to the payee and to the IRS if total annual compensation amount is above $600

You are required to issue ONE form 1099misc - to the person whom you pay - if you pay to the agent - issue that form to the agent.

If you issue a payment to the entertainer - you will need to issue form 1099misc to to the entertainer as well. You may issue another form to the agent for information purposes - but you are not required.

When completing Form 1099-MISC, enter the total compensation paid to the entertainer in box 7 (nonemployee compensation). Enter “MN” in box 17 (state) and the amount of nonresident entertainer tax withheld in box 16. Write “Nonresident entertainer tax” in box 15b.

Customer: replied 1 year ago.
Some of the agents and entertainers are corporations, do we still send those 1099s to the IRS because we issues them one for the entertainment tax?
Expert:  Lev replied 1 year ago.

For federal tax purposes with a few exemption - no need to send the form 1099misc to corporations.
In your situation - no need to file with the IRS.
Even though you may not be required to provide Form 1099-MISC to a corporation for federal tax purposes, you must provide the form to the corporation for Minnesota tax purposes. Write “For Minnesota Use Only” across the top.

Expert:  Lev replied 1 year ago.

See here
http://www.revenue.state.mn.us/businesses/withholding/factsheets/FactSheet11.pdf

You might want to keep that document for future references.

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