Do nonprofits need to do 1099s?
Yes! Nonprofits must file 1099s, just like any other organization. Kind of like a W-2, a 1099 is how you notify an employee of how much money they made, a 1099 is a tax form that lets people know of their other sources of income, such as contractor income.
So what are the IRS rules for a nonprofit organization filing a 1099? Let’s start with the forms themselves since there are many different types of 1099 forms. These variants are based on the income source, but here are some of the more common ones:
The 1099-MISC is probably the most relevant one for your organization. Nonprofits will need to fill out a form 1099-MISC for persons, vendors, subcontractors, independent contractors, and others if $600 or more per year is paid in the following circumstances:
- cash payments to fishermen
- crop insurance proceeds
- medical and healthcare payments
- prizes and awards
- proceeds paid to attorneys
- services (including parts and materials)
- other types of payments not covered by another information reporting document
1099s need to be mailed by January 31 each year, so don’t wait. You can purchase the necessary forms at office supply stores, like Office Depot Office Max, or use Aplos Accounting to make it easy.
Your nonprofit organization will also need to file a 1096 with the government, which is basically a list of all the 1099s you sent out. Typically, when you buy a pack of 1099s from the store, it will come with the 1096 and instructions for filing it.
Good luck, and remember to always consult a CPA or trusted professional if you need tax or accounting advice.