Unable to mark contractor inactive

Thank you for joining this thread, @khote82. I appreciate your efforts to find ways to make it work. I'm here to assist you with more details on how to mark a contractor inactive in your QuickBooks Online account.

In QuickBooks Online, it isn't possible to mark a contractor inactive if there are unpaid invoices or bills under the contractor page or tab.

However, I can guide you through the process of making a contractor inactive, regardless of whether there is an open balance. Please note that making the contractor inactive with an open balance will result in an adjusting transaction being created.

Here are the steps:

1. Go to Expenses, then Vendors. 
2. Choose the Contractors that you would like to set as inactive.
3. Click on the Edit button and select Make inactive from the dropdown menu.
4. Select Yes, make inactive.

You can read through these articles on how to manage your contractors and their 1099s. 

To make sure issue is fixed for you, I would like to know how you get on after attempting the steps. Kindly respond to this post, and you can always count on me if you have other questions. I'm just around to help.