How to resolve Lacerte diagnostic ref. 34522 - Form 1099-MISC is required for states with withholding

This article will help you resolve the following e-file critical diagnostic that generates for these states: AZ, CO, CT, DC, GA, HI, IA, IL, IN, KY, MA, ME, MT, NC, ND, NE, NM, NY, OH, OK, PA, SC, VA, WI or, WV.

• Form 1099-MISC is required in the (StateName) electronic file when (StateName) withholding is present. Currently there is (StateName) withholding entered in the "Tax Withheld" section of the "SS Benefits, Alimony, Miscellaneous Income" input screen and no (StateName) withholding entered in the "Form 1099-MISC for E-File Returns" input screen.  If the (StateName) withholding was reported on a Form 1099-MISC, the withholding should instead be entered in the "Form 1099-MISC for E-File Returns" screen, along with payer information and income amounts. (ref. #34552)

To resolve this e-file diagnostic

1. Go to Screen 14.1, SS Benefits, Alimony, Miscellaneous Inc.
2. Scroll to the Tax Withheld section.
3. Remove any entries in State income tax withheld [A].
4. Select the button Form 1099-MISC/NEC for E-File Returns to expand this subsection, and complete the applicable Payer Information:
   • Name of payer
   • Street address, city, State, ZIP Code
   • If located in a foreign country, select the box Foreign Address and enter the Region, ZIP code, and Country
   • Federal identification number
5. Complete all applicable entries in the Form 1099-MISC/NEC subsection.
6. Scroll to the State Information subsection and enter the withholding amount in State tax withheld.
7. Select the State from the dropdown menu.
8. Enter the Payer's state no.
9. Enter the State Income.
10. Select Add from the left menu panel to add the 1099-MISC.
11. Repeat steps above for each 1099-MISC.