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Lev, Tax Advisor
Category: Tax
Satisfied Customers: 28084
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: 10 months ago.
Category: Tax
Expert:  Lev replied 10 months 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 10 months 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 10 months 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 10 months ago.

See here

You might want to keep that document for future references.

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