December 2, 2021
Updated December 8, 2021
Redepositing/Canceling checks issued in a prior calendar year has significant tax compliance and annual reporting implications for a payee and Harvard.
If Harvard has already issued an annual tax document (i.e., 1099 or 1042S) to the payee, a redeposit to cancel a check can render that tax document incorrect and require Harvard to send the payee an amended form – which can also be problematic if the payee has already filed their annual returns.
If you paid a supplier (individual or entity) and need to redeposit/cancel payment(s), here’s how to avoid tax hazards:
- DO: Process check redeposits in the same calendar year that the original payment was originally issued.
- DO: Monitor the HART Cash Management – Escheat Due Diligence Report for any non-payroll checks that have not been cashed within 6 months and take action.
- DO: Be aware that check stop & redeposits for checks issued in a prior calendar year to 1099 vendors could have tax reporting implications. For 1099-related questions, reach out to AP_CustomerService@harvard.edu.
- DO NOT: Process a check stop & redeposit for checks issued in a PRIOR CALENDAR YEAR without a prior review and approval from Nonresident Alien Compliance Manager at natasha_rivera@harvard.edu for any 1042S – foreign individual or foreign entity supplier.
Coming in January 2022- Updated Check Inquiry Form