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Direct deposit for vendors gives you the ability to send direct deposits to 1099 independent contractors in QuickBooks Desktop Payroll.

Important: In order for Intuit to meet Federal and State conformity requirements on a regular basis across all of our offerings, the Intuit Direct Deposit service cannot be used to pay bills or make payments to individuals or entities who are not independent contractors.

Particulars about 1099 independent contractors:

What is an independent contractor?  Use the resources to determine if individual providing services are an employee or independent contractor:

  • gov:  Independent Contractor Defined
  • gov:  Independent Contractor (Self-Employed) or Employee?
  • Intuit Guide to Hiring:  Classify Workers Correctly: independent contractors vs. Employees
  • If you need to set your file up to create 1099-MISC forms and mark your vendors eligible for 1099s, see, Set up a vendor and print 1099/1096 forms for additional details.

Getting Started

Step 1. You are required to prepare the following before you sign up

  • The vendor must be a 1099 independent contractor.
  • QuickBooks Desktop Payroll Basic, Standard & Enhancedcustomers must have  latest release of QuickBooks Desktop installed, and must sign up for the Direct Deposit service. QuickBooks Desktop Payroll Assisted customers must have the latest release of QuickBooks Desktop installed.

Step 2. Signing up direct deposit for independent contractors

Once you have activated direct deposit for paying employees, you can activate it for paying 1099 vendors.

For Assisted Payroll

  1. Open the Vendor Centre.
  2. Select a vendor and double-click their name. The Edit Vendor window will open.
  3. Choose the Additional Info tab and select the Direct Deposit This will open the Payroll Service Account Information page.

4. Enter your Direct Deposit PIN and select Continue.

5. Follow the onscreen instructions until you get to the Confirmation  Now you will be able to set up your independent contractors for direct deposit.

 For Basic, Standard and Enhanced payroll

  1. Select Employeesmenu > My Payroll Service > Account/Billing Information.
  2. Login using your Intuit Account that owns the payroll license. ote: Only certain administrator roles on the main Intuit account will be able to activate direct deposit.
  3. Enter your direct deposit PIN when prompted. Go to the Payroll Details Section. Select Activate under the 1099 Vendor payment area.Important: Direct Deposit Status must be “Active” before the 1099 Vendor payment area will appear.  If direct deposit shows inactive, you must  set up direct deposit

Step 3. Adding information of direct deposit to your independent contractors

Before you can are allowed to pay 1099 vendors by direct deposit, you will be required to notify them and collect their bank account information. You can use the same  sample forms used for employees.

  1. Open the Vendor Centre.
  2. Double-click the vendor you want to add direct deposit to.
  3. Choose the Additional Infotab and select the Direct Deposit
  4. Select the Use Direct Deposit for: [Vendor Name] Enter bank routing and account number, bank name, and account type. Split direct deposit payment is not available for independent contractors. Important: If QuickBooks Desktop is rejecting the Bank Account information when entered, it is important to verify the bank account information.
    • Ask your vendor call their banking institution to validate that the bank account number and routing number are valid for ACH transaction.
    • Bank Account should be a U.S. account.
    • Verify the vendor name set-up in QuickBooks Desktop. Do not put special characters (such as dashes or hyphens) which can cause the sign-up to fail.
  5. Select Send confirmation direct deposits to [email address]if you would like Intuit to send an email confirming payment. If no email address is shown or if the email address is wrong. You can add or update the email address by selecting the Address Info Intuit will send an email to the email address entered, two days before payment will arrive in the independent contractor’s bank account. The E-mail will include:
    • Name of Your company
    • The amount of payment
    • The date the payment will arrive in the independent contractor’s bank account (the date shown on the independent contractor’s check in the check register)
    • The last four digits of the independent contractor bank account number
  6. Enter your direct deposit pin when prompted.

What’s next?

Edit an independent contractor’s direct deposit information

Vendor’s bank account information can be updated on the same page where you had set it up.

  • Enter your direct deposit PIN when prompted.

Unlike changing the direct deposit account for employees, with Independent Contractors, even though you change the direct deposit bank account and send to Intuit, the account is not updated until you create a payment for the independent contractors and send.

Remove direct deposit permanently from an independent contractor’s profile

If you no longer want to pay a vendor for direct deposit, you can remove them from the set up.

  1. Select Vendorsand choose Vendor Centre.
  2. Double-click the name of the vendor whose profile you want to edit.
  3. Select Additional Info
  4. Select Direct Deposit
  5. Select to clear the box Use Direct Deposit for:this vendor.

To Know more about to direct deposit for independent Contractors in QuickBooks Call QuickBooks Support USA on their toll-free number Also, you can write to us at Feel free to reach us anytime; our team of executives is 24*7 available at your service. For more information visit,

Post Author: qbooks247

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