If it is determined that the payment would be reportable as a direct payment, then it is also reportable if made to a third party. An agency should exercise due diligence in determining the SSN or FEIN of a payee. Due diligence standards to be applied depend on the individual circumstances. Due to the complex nature in determining reportability to non-resident aliens agencies are advised to obtain Internal Revenue Service Publication 519, U.S. Tax Guide for Aliens, and apply the reportability determination based on individual analysis. The reporting rules for payments from federally financed projects are basically the same as those for State funds.
Special rules apply to certain areas such as scholarship and research grants.
These must be investigated on an individual basis to determine whether they are exempt or reportable. Foster Care Payments Amount paid to foster parents for qualified foster care are non-reportable. A qualified foster child is an individual who is less than 19 years old and is living in a foster family home in which he was placed by the state. The Internal Revenue Service has ruled that payments for foster care are exempt from 1099 reporting. Payments from Petty Cash All reportable payments from the agency's petty cash account must be summarized annually and forwarded to the Comptroller's Accounts Payable Division, Special Processing Section.