DoD Government Convenience Checks
Before You Pay
Before you pay a vendor with a DoD government convenience check, consider the convenience check alternatives. GSA describes a multitude of alternative payment methods on their website at: https://smartpay.gsa.gov/sites/default/files/downloads/SP%20Convenience%20Checks%20Slipsheet%20508.pdf
We highly recommend the use of the Wide Area Workflow (WAWF)/myInvoice to submit the payments as it includes the miscellaneous payment code field for non-contractual payments. Another method to submit non-contractual (miscellaneous) payments is through your command channels for payment processing. Using the miscellaneous payment process provides an audit trail in the payment system and the accounting system. The link to the DoD Guidebook for Miscellaneous Payments
IRS has resurrected IRS Form 1099-NEC and redesigned IRS Form 1099-MISC. Beginning tax year 2020, all payment amounts previously reported in Box 7, Nonemployee Compensation of the 1099-MISC will now be reported in Box 1, Nonemployee Compensation of the 1099-NEC.
Currently, DoD convenience check writers (account holders) obtain, complete, and submit convenience check data to the DFAS ESS Tax Office via a specifically formatted spreadsheet provided by the Tax Office. Beginning September 2020, the DFAS ESS Tax Office will obtain all the DoD convenience check data from U.S. Bank. The Tax Office will send a spreadsheet containing the check data to the responsible Agency Program Coordinators (APCs). The APCs will have the convenience check writers confirm the data and complete any missing information and provide a description of the check payment. The APC returns the completed spreadsheet promptly to the Tax Office. Check Writers will be notified by email with new instructions for convenience checks.
Convenience Check Data Reporting via Spreadsheet
The DFAS ESS Tax Office is responsible for the DoD tax form issuance and IRS reporting for the DoD government convenience checks issued to pay vendors and individuals for one-time services
performed for the DoD. (Ref. FMR Vol. 10, Chapter 230603
Types of Check Payment Data and Vendor Data Reported
Certain types of check payment data are not reportable. For excluded payment types, see the links at the bottom of this page titled, “What is and Is Not Reportable
and General Instructions for Certain Information Returns
Certain types of vendors are not reportable. For excluded vendors, see the link at the bottom of this page titled, “IRS Exempt Organization Types
, 26 U.S. Code 501 Exemption from tax on corporations, certain trusts, etc.
, and Tax Exempt Organization Search”.
Obtaining the Vendor Information
To ensure the capture of necessary vendor information, request the vendor complete an IRS Form W-9 (U.S. vendor) or an IRS Form W-8 BEN (foreign person) before
paying the vendor. The links to these forms are located below.
Payments made to Foreign Persons
The IRS states, “A foreign person includes a nonresident alien individual, foreign corporation, foreign partnership, foreign trust, foreign estate, and any other person that is not a U.S. person. https://www.irs.gov/individuals/international-taxpayers/foreign-persons
Payments made to a foreign person may require the check writer to withhold taxes and report the tax withholding to the IRS.
We highly recommend the use of the Wide Area Workflow (WAWF)/myInvoice to submit the payments for foreign persons as it includes the miscellaneous payment code field for non-contractual payments. This will also allow for proper withholding of taxes if applicable. An additional method to submit non-contractual (miscellaneous) payments is through your command channels for payment processing. Using the miscellaneous payment process provides an audit trail in the payment system and the accounting system. The link to the DoD Guidebook for Miscellaneous Payments
For assistance with reporting convenience check data for tax form issuance, contact the DFAS ESS Tax Office at firstname.lastname@example.org
Information for Convenience Check Data Reporting
IRS Information and Forms
DoD – Department of Defense
DFAS – Defense Finance & Accounting Service
ESS – Enterprise Standards and Solutions
GSA – General Services Administration
IRS – Internal Revenue Service
Page Updated 10/27/2020
APC – Agency Program Coordinator
WAWF – Wide Area Work Flow or iRAPT