Thanks for joining in on the thread, nancy225 and kt18.

We know that the payments to 1099 vendors made via credit card, debit card, or third party system, such as PayPal, are excluded from the 1099-MISC and 1099-NEC calculations. With that said, we'll need to review each transactions. From there, we can change what transactions need to be included or excluded when filing the 1099s.

To pull up the excluded payments, you can follow the steps under the QuickBooks Desktop section of this article: What payments are excluded from a 1099-NEC and 1099-MISC?.

You'll have to open each transaction and update the payment methods.

To pull up the included payments report, you can use this reference: Excluding nonreportable payments from Form 1099-MISC.

You can do the same thing which is to update the payment methods.

I'd also recommend keeping your QuickBooks release and the Payroll Tax Table versions updated. This'll remove unexpected issues when managing forms in QuickBooks Desktop.

Keep us posted so we can also review other options to correct the data.