When you’re running a nonprofit, it can feel daunting to think about filling out yet another form. IRS Forms are notorious for being confusing and overly complicated. Chances are you’d rather focus your energy on something else—like your organization’s mission.
But fear not! IRS Form W-9 is actually a pretty simple form whether you’re requesting it from someone else or you have to fill one out yourself. In this article, we’ll dig into the following:
- What is a Form W-9 for Nonprofits?
- When Do You Need to File a Form W-9?
- How to Fill out the Form W-9 for Nonprofits
- How to Submit a Form W-9
Read on for a step-by-step guide to make filling out a Form W-9 a breeze.
1. What is a Form W-9 for Nonprofits?
Your first step is to make sure you understand what the form is used for.
IRS Form W-9 is used when a business or entity needs to obtain the Tax Identification Number (TIN) from a contractor or business they have conducted business with. Typically, the Form W-9 is only needed if the business has paid a contractor over $600 for the course of the year.
The information collected on the Form W-9 is then used by the business to file the Form 1099-MISC, which documents the total amount of money paid to the contractor. Neither the business that requested the form W-9 or the contractor will file the Form W-9 with the IRS.
Along with a contractor’s TIN, the Form W-9 also collects information on their backup withholding status. In most cases, the contractor is not subject to backup withholding and is therefore responsible for paying taxes on that income.
What does this mean for nonprofits? As you know, you may be tax-exempt but that doesn’t mean you don’t have to report anything to the IRS. Your biggest annual reporting happens with Form 990. However, there are two cases where you’ll have to worry about filling out or requesting the Form W-9.
2. When Do You Need to File a W-9?
Here are two instances where you might need to deal with Form W-9:
- You get paid by someone else. Let’s say you run a 501(c)(5) agricultural nonprofit, and you provide some paid consulting work to a different farming cooperative. That cooperative will request a form W-9 from your organization. Your organization has to fill out the form and return it in a timely manner so the farming cooperative can file the form 1099-MISC documenting that paid work.
- You pay someone else. Your organization partners with a local artist to design and paint a mural around the city promoting your campaign. After you’ve paid the artist anything more than $600, you should request a form W-9 from them. This will give you their TIN, address, and name so you can successfully document the income paid on a Form 1099-MISC. Be sure to check the Instructions for Requester of Form W-9 to ensure you’re within your rights to ask someone else for their TIN.
3. How to Fill Out the Form W-9 for Nonprofits
IRS forms can be a headache. Luckily, Form W-9 for nonprofits is one of the more straightforward forms. When you have to fill out the form—like in situation #1 in the section above—here are the 8 simple steps you need to follow to quickly get it done.
- Step #1: Write your corporation name
- Step #2: Enter your business name
- Step #3: Know your entity type
- Step #4: Your exempt payee code
- Step #5: Give your mailing address
- Step #6: List account numbers
- Step #7: Taxpayer Identification Number (TIN)
- Step #8: Certify your information
Step 1 – Write your corporation name
Step 2 – Enter your business name
Sometimes referred to as your assumed name or fictitious name, this should be the name your organization operates under. Only enter this if it’s different from your corporation name.
Pro tip: This is the name the public sees most often, which is usually only slightly different from the official name on your articles of incorporation (i.e., your official name includes “Inc.” and your business name does not).
Step 3 – Know your entity type
Step 4 – Your exempt payee code
Step 5 – Give your mailing address
Step 6 – List account numbers
Step 7 – Taxpayer Identification Number (TIN)
Mark your Employer Identification Number (EIN) issued by the IRS here. Need to apply for an EIN? You first need to file Form SS-4 as soon as possible. Once you’ve applied (or if you plan on applying right away), you can write “Applied For” in the space for the TIN, sign, and date the form as you normally would, and give it to the requester. Usually, this means you have 60 days to provide your TIN to whoever requested a W-9 from you. But you should double-check with your own tax advisors to be sure your payment type is eligible for this extension.
Step 8 – Certify your information
This section is also pretty straightforward, though you should check the instructions included in the form to be sure your unique situation doesn’t require any further acknowledgment. This section simply asks you to certify that the information you provided is true to the best of your knowledge. Sign on the line and mark the day’s date.
And that’s it! Once it’s filled out, you can move on to the next step.
4. How to Submit a Form W-9
Submission depends on what side of the Form W-9 you’re on: requester or requestee. Here’s what to do in either case.
- Someone asked your organization to complete Form W-9. Great! All you have to do is fill the form out and get it back to them ASAP. It’s a good business practice to take no more than around a week to get the form back to them once you receive the request. Since it’s such a simple form, you shouldn’t run into any major snags unless you have to apply for an EIN.
- Your organization asked someone else to fill out a W-9. When you request the form, give clear instructions for how you’d like to receive the signed form. You can ask them to fax it to you or even send a copy via email.
Once you have the signed form, you can look into completing Form 1099-MISC and returning it to the person or organization in question. Usually, if your organization has paid at least $600 throughout one year to a non-employee for services, parts, and materials needed for your organization’s business, you must furnish a Form 1099-MISC to that person by January 31 of the following year.
Although filling out IRS forms can sometimes feel like a nightmare, the Form W-9 is luckily pretty simple for nonprofit organizations. This leaves you more time to focus on the work that really matters and less time squinting at the small type on a form.
The most important step? Know that you got this. With some careful work, you can fill out the Form W-9 easily and correctly. The business or individual you’re working with will thank you for a prompt response!
Looking for more ways for running your nonprofit easier? Check out the other resources on our nonprofit blog.