Overview of Form 1099-MISC for Nonprofits
A non profit must give a Form 1099-MISC to an independent contractor who is paid $600 or greater in a calendar year. Independent contractors include non-corporate business entities. Nonprofits that hire contract workers and pay at least $600 must issue 1099-NEC documents or 1099-MISC forms to report payments. Nonprofits must be compliant with tax responsibilities when engaging independent contractors.
Reporting Requirements and Penalties
Your company must file Form 1099-MISC for non-corporate nonprofits paid over $600 for services during the tax year and send it to the nonprofit. Request nonprofits complete a W-9 which provides information to complete the 1099. There are penalties for late or incorrect 1099 filing per form.
Exemptions and Exceptions
Who is exempt from getting a 1099? Corporations are generally exempt from 1099 reporting. A non profit is considered engaged in business or trade. Businesses must issue a 1099 to a payee receiving over $600. In most cases, missionaries are independent contractors and churches must issue a 1099 for funds used as living expenses. You must report nonemployee compensation, payments for services to non-employees over $600 on a 1099-NEC.
More about 501(c)(6) Organizations
A 501(c)(6) organization is a chamber of commerce which qualifies as a non profit exempt from income tax. A 501(c)(6) must file an annual Form 990.