Form W-9 for Nonprofits: A Comprehensive Guide to Compliance and Reporting

There are times when your nonprofit works with other businesses or individuals to fulfill its mission – like when an animal shelter partners with a veterinary clinic for medical services.

Organizations may even seek your nonprofit's expertise, such as when a school district requests your guidance on sustainable practices. These partnerships come with specific reporting requirements, and one of them is the IRS W-9 form – a straightforward document that your nonprofit either needs to complete or request from your business partners.

In this blog, we will discuss in detail what the W-9 form is all about, including step-by-step instructions to complete it accurately. 

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Table of contents

What is Form W-9 and why do nonprofits need it?

When are 501(c)(3) organizations required to fill out a W-9?

7-step process for filling out a W-9 for your nonprofit

How to submit Form W-9

Final thoughts on Form W-9

FAQs on Form W-9 for nonprofits

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What is Form W-9 and why do nonprofits need it?

A W-9 form, officially named "Request for Taxpayer Identification Number and Certification," helps nonprofits collect Tax Identification Numbers (TIN) from contractors and businesses they work with. Nonprofits use this information to complete Form 1099, which reports miscellaneous income to the IRS. 

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The W-9 form is kept internally by your organization rather than submitted to the IRS. It serves as documentation that you've collected accurate taxpayer information needed for Form 1099 reporting and provides legal verification of the details provided.

For example, if you hire a graphic designer for your nonprofit’s marketing campaigns and pay them over $600 in a year, you'll need a completed W-9 from them to issue their 1099-NEC during tax filing.

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When are 501(c)(3) organizations required to fill out a W-9?

1. You work with a contractor

When you work with a contractor and pay them more than $600, you need to request a W-9 form from them rather than completing it yourself. The form provides details like their TIN and mailing address – information you'll need to include on Form 1099, along with the amount you paid them. 

Before requesting a W-9, check the "Instructions for Requester of Form W-9" to determine when you need to collect a contractor's TIN.

If you've been working with this contractor for a long time, you can continue using the W-9 form they previously submitted. It’s important to regularly review if their information is still accurate – if their address or TIN changes, you'll need to obtain a new W-9 form from them.

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2. You work as a contractor 

If your nonprofit provides services to other organizations, they may request a W-9 form from you. 

For example, if your environmental nonprofit offers paid training services on sustainable practices to local businesses, those businesses will need your W-9. Complete and return the form promptly so they have enough time to complete Form 1099.

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7-step process for filling out a W-9 for your nonprofit

1. Write your official name 

There are two ways to enter your nonprofit name in the W-9 form:

• Name of entity/individual: Enter your official name exactly as it appears on your founding documents (such as articles of incorporation).
• Business name/disregarded entity name: Enter your organization's "doing business as" (DBA) name only if it differs from the official name in your articles of incorporation. Skip this section if your organization doesn't have a separate DBA name.

For example, if your organization is incorporated as the Youth Environmental Education Foundation of California but is commonly known as Youth Eco Foundation, you would write "Youth Environmental Education Foundation of California" in Box 1 and "Youth Eco Foundation" in Box 2.

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2. Specify your organization’s tax classification

The W-9 form next requires you to select your federal tax classification. It offers the following options:

• Individual/Sole Proprietor:
  Single-owner business reporting income on personal tax return
• C Corporation:
  Separate legal entity taxed at the corporate level
• S Corporation:
  Corporate entity with special tax status allowing income to pass to shareholders
• Partnership:
  Business owned by multiple individuals sharing tax obligations
• Trustee/Estate:
  Legal entity managing assets with specific tax reporting
• Limited Liability Company (LLC):
  LLCs can choose to be taxed as sole proprietorships (single-member), partnerships (multi-member), or corporations based on their filed elections with the IRS
• Other:
  Unique classifications, including tax-exempt organizations

If you're incorporated as a nonprofit corporation under Section 501(c), select "C Corporation." For other tax-exempt nonprofits, mark "Other" and write your specific tax exemption code, such as 501(c)(3).

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3. Check your exempt-payee code 

The exempt payee code indicates whether payments are subject to backup withholding. This includes:

• Interest and dividend payments
• Broker transactions
• Barter exchange transactions
• Patronage dividends

Nonprofit organizations under IRS Section 501(a) are exempt from backup withholding. While you can leave this section blank, it's advisable to verify backup withholding requirements for your specific case.

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4. Enter both your address and the requester’s address

There are two boxes on the W-9 form for your address details. In Box 5, write your organization's street name, street number, and apartment or suite number. In Box 6, enter your city, state, and ZIP code.

The form also includes space for the requester's name and address. While optional, filling this section helps track which organizations have your nonprofit's information, especially if you submit W-9s to multiple contractors.

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5. List the account number 

Your contracting organization might use a numbered system to track payments it makes to its different partners. If they have assigned your nonprofit a specific account number for their internal tracking, include this number on the form. Leave this section empty if you haven't been given an account number.

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6. Mention the taxpayer identification number (Part I)

Unlike individual contractors who use their Social Security number, nonprofits must use their Employer Identification Number (EIN).

If you haven't received your EIN yet, write "applied for" in the TIN section – and within the next 60 days, send them your updated EIN.

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7. Complete your W-9 certification (Part II)

In the final section, you must certify that the information you provided is true. You have to confirm that:

• You are not subject to backup withholding
• You are a U.S. citizen or other U.S. person (including U.S. resident aliens, partnerships, corporations, or associations created or organized in the United States, domestic estates, and domestic trusts as defined by IRS regulations)
• Your FATCA codes, if any, are correct

Review all information thoroughly before signing and submitting your W-9 form.

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How to submit Form W-9

Submitting the W-9 form depends on whether you're requesting the form or being asked to fill it out. Here's what to do in both cases:

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When You're Responding to a W-9 Request

If a contractor requests the W-9 from your nonprofit, you must complete and return the form as soon as possible, ideally within a week of receiving the request. It won’t take long unless you need to apply for an EIN, which takes time.

After receiving your form, the requester will use your information to complete your Form 1099 and send it to you by the January 31 deadline.

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When You're Requesting a W-9

If your nonprofit requests the form from another organization, specify how you want to receive the signed form, whether through fax, email, or online document services. 

Once you receive the signed W-9, you can complete Form 1099-MISC and issue it to the contracting organization and the IRS.

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Final thoughts on Form W-9

The W-9 form is crucial in nonprofit tax compliance, serving as a vital link between organizations, contractors, and the IRS. The form collects essential details, including name, Taxpayer Identification Number, mailing address, and backup withholding status.

When working with contractors, request the W-9 form before starting the relationship and verify all information is complete and accurate. Keep these forms secure and updated to accommodate any changes in the contractor’s details during your association with them.

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FAQs on Form W-9 for nonprofits