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Form 1099 for Nonprofit Organizations:
Reporting Requirements
When a nonprofit files Form 1099-NEC or 1099-MISC, which payees and payments are reportable, and how to collect W-9s
from independent contractors and sole proprietors.
In This Page
In This Page
- What is a Nonprofit Organization?
- Which Payments Must Nonprofits Report on Form 1099?
- Payments That May Not Require Form 1099
- Which Forms 1099 Do Nonprofits Need to Use?
- Why Do Nonprofits Need Form W-9?
- Form 1099 Thresholds and Changes for 2026
- Form 1099 Deadlines for Nonprofits
- Penalties for Late or Incorrect Form 1099 Filing
- Frequently Asked Questions
By Charles Hardy | Last Updated: Oct 16, 2026
Key Insights
- Nonprofits are payers like any other business. The IRS treats them as engaged in a trade or business, so tax-exempt status does not remove the duty to report payments.
- The payment decides the form. Form 1099-NEC reports payments for services. Form 1099-MISC reports rents, prizes, grants to individuals, and other income.
- The payee decides whether a form is needed. Individuals, sole proprietors, and partnerships are reportable. Corporations and other tax-exempt organizations are generally not.
- Collect a Form W-9 before the work begins. Without a TIN, the nonprofit must apply 24% backup withholding.
What is a Nonprofit Organization?
A nonprofit organization is established to serve a public, charitable, educational, religious, or other qualifying purpose rather than to distribute profits to owners or shareholders. Which includes:
- Charitable organizations
- Churches
- Educational institutions
- Certain community organizations.
Nonprofit organizations may pay independent contractors, attorneys, landlords, and other service providers as part of their operations. Depending on the payment type, amount, and applicable IRS rules, these payments may need to be reported on Form 1099.
Important: A nonprofit's tax-exempt status does not automatically exempt it from all Form 1099 reporting requirements. The reporting obligation depends on the organization, the recipient, and the type of payment.
Which Payments Must Nonprofits Report on Form 1099?
Nonprofits may need to report the following types of payments, depending on the amount, recipient, and applicable
IRS rules:
- Nonemployee compensation: Payments to independent contractors and other nonemployees for qualifying services.
- Rent: Reportable rent paid for office space, buildings, equipment, or other property.
- Attorney payments: Certain payments for legal services and gross proceeds paid to attorneys.
- Medical and health care payments: Qualifying payments made to medical and health care providers.
- Prizes and awards: Certain prizes, awards, and other reportable payments.
- Royalties: Qualifying royalty payments.
- Other reportable income: Certain miscellaneous payments covered by IRS information-reporting rules.
The reporting threshold varies by payment type. For example, the general threshold for certain nonemployee compensation and other covered payments made in 2026 is $2,000, while royalties generally have a $10 threshold.
Payments That May Not Require Form 1099
Some payments may be excluded from Form 1099 reporting, depending on the circumstances and IRS rules.
- Employee wages: Generally reported on Form W-2 rather than Form 1099.
- Certain payments to corporations: Many payments to corporations are exempt, although legal and medical payments can be exceptions.
- Payments below the applicable threshold: Generally not reportable unless another rule, such as backup
withholding, applies. - Certain volunteer expense reimbursements: Properly handled reimbursements may not need to be reported as
nonemployee compensation. - Payments covered by specific IRS exceptions: Certain transactions or recipients may qualify for an exemption.
Do not assume a payment is exempt just because the recipient is a corporation or the payer is a tax-exempt nonprofit.
Which Forms 1099 Do Nonprofits Need to Use?
The form a nonprofit must file depends on the type of payment made. The two most common forms are Form 1099-NEC and Form 1099-MISC.
- Form 1099-NEC: Used to report qualifying payments for services performed by nonemployees, including independent contractors and attorneys. For payments made in 2026, the general reporting threshold is $2,000.
- Form 1099-MISC: Used to report qualifying rent, royalties, prizes and awards, medical and health care payments, and other reportable income. The threshold varies by payment type.
- Other 1099s: Depending on the transaction, a nonprofit may also need other information returns, such as Form 1099-INT for reportable interest payments.
The IRS provides separate instructions for each form. Review the applicable requirements before deciding which form to file.
Before preparing these forms, nonprofits should collect Form W-9 from U.S. payees when applicable to obtain their legal name, taxpayer identification number (TIN), and federal tax classification.
Why Do Nonprofits Need Form W-9?
Nonprofits should request Form W-9 from U.S. contractors and other payees when needed to collect their legal name, taxpayer identification number (TIN), and federal tax classification. This information helps determine Form 1099 reporting requirements and whether backup withholding applies.
Keep completed Forms W-9 securely stored and use the information to prepare accurate information returns.
Form 1099 Thresholds and Changes for 2026
For payments made in 2026, the general reporting threshold for certain Form 1099 payments has increased from $600 to $2,000 under the One Big Beautiful Bill Act (OBBBA). The change applies to specified payment categories, not all Form 1099 transactions.
- Form 1099-NEC: The general threshold for reportable nonemployee compensation is $2,000.
- Form 1099-MISC: The $2,000 threshold applies to certain payment categories, including rents and prizes or awards. Other categories, such as royalties, retain different thresholds.
Form 1099 Deadlines for Nonprofits
For payments made in 2026, nonprofits generally must provide recipient statements and file information returns by the applicable
IRS deadlines.
| Form | Recipient deadline | E-Filing Deadline | Paper Filing Deadline |
|---|---|---|---|
| Form 1099-NEC | February 1, 2027 | February 1, 2027 | February 1, 2027 |
| Form 1099-MISC | February 1, 2027 | March 31, 2027 | March 1, 2027 |
Note: Certain Form 1099-MISC payments, including amounts reported in boxes 8 or 10, have a recipient deadline of February 16, 2027. Deadlines may shift when they fall on a weekend or legal holiday.
Penalties for Late or Incorrect Form 1099 Filing
The IRS may impose separate penalties for filing incorrect information returns and failing to provide correct recipient statements on time. The penalty depends on when the return or statement is corrected.
| Filing failure | Penalty per return or statement due in 2026 |
|---|---|
| Corrected within 30 days after the due date | $60 |
| Corrected more than 30 days late, but by August 1 | $130 |
| Filed after August 1 or not filed | $340 |
| Intentional disregard of filing requirements | $680 |
These penalties generally apply per information return or recipient statement. Annual maximums may apply, depending on the organization and circumstances. There is no maximum penalty for intentional disregard.
Frequently Asked Questions
Not necessarily. Payments to tax-exempt organizations are generally excluded from certain Form 1099 reporting requirements. However, the specific payment and applicable IRS rules should be reviewed before treating a transaction as exempt.
Nonprofits should generally request Form W-9 from U.S. contractors and other reportable payees to obtain their taxpayer identification numbers and tax classifications. The information helps determine reporting and backup withholding requirements.
Donations received by a nonprofit are generally not reported as payments made to contractors on Forms 1099-NEC or 1099-MISC. These forms primarily cover certain payments made by an organization, rather than ordinary charitable contributions it receives.
The nonprofit should review the applicable IRS correction procedures and submit a corrected return when required. It may also need to provide a corrected statement to the recipient.
Yes. Some states have additional information-return reporting rules, filing methods, or deadlines. Nonprofits should check the requirements for each state where they have reporting obligations.
