Reporting interest on late employee payments

February 13, 2020


Q. Very unique situation! Our payroll processor did not push a button to process a very large payment to a few of our employees. This caused a three-day delay in our top associates receiving their funds. To correct their error, they issued the amount of interest the associates lost. We processed that interest payment to the associates using the AP process, in the sense that we were to issue a 1099 to those associates. Now the question is, since we were not the originator of the interest (that…

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