Form 1099-MISC communicates to the IRS and the recipient the amount of money your organization paid to the recipient during the year.
Note: Churches are not exempt from filing 1099s!
Your church or nonprofit organization should send an IRS Form 1099-MISC to independent contractors...
that you paid amounts $600 or more in rents, services, prizes and awards and other income payments. (See below for comments from an IRS agent regarding this subject.)
Note: when your church hires someone to perform services such as janitors, secretaries, nursery workers, etc., they are not usually considered independent contractors.
They are most likely considered employees and should be
issued W-2s. One of the biggest errors churches can make is incorrectly classifying an individual. See this article on Misclassification of Workers.
See this page on the IRS site for more clarification on that issue:
If you do determine an individual is an independent contractors, payments for services go in box 7 - Nonemployee compensation (on a 1099-MISC).
Some examples of independent contractors may include: repairmen, accountants, attorneys, cleaning services, and lawn care services.
Revival ministers, supply preachers and guest speakers are usually classified as independent contractors and should be issued a 1099 if the total paid to them in the year was $600 or more.
If your church or nonprofit rents from an individual, you should probably send them a 1099. The amount would be recorded in Box 1. See this post: "Churches Issuing Form 1099-MISC to Landlords" in the Ministry CPA's Blog.
You should not pay an independent contractor until you have received a completed and signed W-9.
Use Form W-9 "Request for Taxpayer Identification Number and Certification" to obtain names, address, and taxpayer identification numbers (SSN or FEIN) from people you will be required to provide form 1099-MISCs.
Have all independent contractors fill out a W-9 even if you think they are incorporated. If they are, there is a place on the W-9 for them to indicate they are incorporated.
Note: Churches should require all guest speakers to complete a W-9 and then keep that completed W-9 on file ... even if they do not believe they will be required to send them a 1099.
The period for which you report payments is the calendar year, not your fiscal year. The forms must be “furnished to recipients” and to the IRS by January 31! That due date applies to paper and electronic filings!
*Notice: You cannot download a usable 1099 from the web! The original that’s filed with the IRS is printed in red ink and is read by a scanner.
You can order forms from the IRS at no charge, or purchase them from an office supply store. You can reach IRS at 1-800-TAX-FORM to request the ones you need.
Make sure to get the transmittal form too!
It is Form
1096.Form 1096 is the cover page for the 1099s that will be submitted to
the IRS. The 1096 summarizes the total payments included on all of the
Click here to view instructions for the IRS form 1099.
Electronically filing 1099s are the easiest way to file 1099s! If you efile your 1099s you can skip the 1096 form, but be aware that you will pay a fee to electronically file your 1099s with one of the IRS recommended vendors. See IRS Pub 1220.