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Form W-9 for Nonprofits: What It Is + How to Fill It Out

Sunday, October 13, 2024

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Imagine your nonprofit’s leaders have an idea for a specialized project to further your mission, but none of your current employees have the bandwidth or expertise to complete it effectively. While you could hire a new staff member, it’s more cost-effective and less time-consuming to contract out the project to an experienced professional or consultant.

Before you get started with contracting, there are some financial management considerations that your nonprofit should be aware of at the outset. One of these is the additional tax forms you’ll need to complete, including IRS Form W-9.

In this guide, you’ll learn all you need to know about Form W-9 and its uses in the nonprofit sector, including:

Form W-9 is closely connected to another IRS tax document, Form 1099, so we’ll mention both frequently as we walk through processes and applications related to the W-9. However, let’s start by distinguishing the W-9 to help you understand its unique purpose.

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What Is Form W-9 for Nonprofits?

The IRS designation for Form W-9 is the “Request for Taxpayer Identification Number and Certification.” It’s used to request tax information from contractors—whether your nonprofit has contracted work from someone else or someone else has contracted work from you (more on this later!).

The purpose of Form W-9 is to provide the necessary tax information for contracting organizations to complete Form 1099, which the organization and the contractor both use to report miscellaneous income and non-employee compensation to the IRS. Then, the IRS will use W-9s to ensure contractors’ individual tax returns and organizations’ submitted 1099s match.

Form W-9 is six pages long when printed, although contractors only need to fill in information on the first page (the rest of the form contains instructions and notices). It should look something like the example below:

Sample of IRS W-9 form.

Nonprofit W-9 Use Cases

There are two situations in which your nonprofit might encounter Form W-9: Either you need to request one from a contractor you hired, or you need to fill one out because another organization paid your nonprofit for contract work. Let’s dive into both of these cases in more detail.

Requesting a W-9 From Contractors

If you’ve contracted someone to work for your nonprofit, you won’t complete a W-9 yourself but instead ask the contractor to fill it out. Once they do, you’ll file it and use the information to issue them a 1099, as long as the recipient of your payments:

Conditions for issuing 1099 & W-9.
  • Is not an employee of your nonprofit
  • Is an individual, partnership, vendor, or estate
  • Performed services in the course of your organization
  • Received at least $600 in total payments during one calendar year

If you anticipate that you’ll need to issue a 1099 to a contractor based on these conditions (and it’s likely that you will), request a W-9 early in your relationship with them to ensure you have it readily available when you complete your 1099s. For contractors you work with across multiple years—for example, if you pay the same freelance graphic designer to create your GivingTuesday marketing materials every year—you can reuse the same W-9 unless the contractor’s information changes.

Filling out a W-9 for Contract Work

Other organizations may also pay your nonprofit to provide services to them based on your team’s experience and expertise. For example, if a brand-new nonprofit in the same vertical as yours launches in a nearby city, they could contract your well-established organization for consulting services to help them get up and running. In this case, the contracting organization will request a W-9 from you and then use the information you provide to issue you a 1099.

Steps to Fill out Your Nonprofit’s W-9

If someone requests a W-9 from your nonprofit, it’s relatively simple to complete compared to other tax forms. We’ve broken it down into seven steps to make it even easier for you to get started.

Checklist of seven steps to complete a W-9 for nonprofits.

1. Write Your Nonprofit’s Name

The first two boxes on the W-9 ask for your nonprofit’s official and unofficial names, respectively. Your official name is the name listed on your organization’s founding documents (articles of incorporation, Form 1023, etc.) and annual tax return. Your unofficial name is the name your nonprofit is generally known by, which may or may not be different from your official name.

For example, let’s say your organization was incorporated as the Cat Rescue Society of Central North Carolina, but your team and community usually shorten its name to the Cat Rescue Society. You’d write “Cat Rescue Society of Central North Carolina” in Box 1 and “Cat Rescue Society” in Box 2 of your W-9.

2. Name Your Organization’s Tax Classification

Box 3 of the W-9 asks your nonprofit to select its federal tax classification. Your options include:

  • Individual/Sole Proprietor
  • C Corporation
  • S Corporation
  • Partnership
  • Trustee/Estate
  • Limited Liability Company
  • Other

In most cases, you’ll either check the C Corporation classification for your organization or check Other and write in “Nonprofit Corporation.” If you were filling out this form as an individual (as many of your nonprofit’s contractors do), you would check the Individual/Sole Proprietor box. Consult your organization’s lawyer or accountant if you have questions about your classification.

3. Double-Check the “Exempt Payee Code” Box

Box 4 (the exempt payee code) of the W-9 indicates whether payments are subject to backup withholding. Types of payments that may fall under this category include:

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

Your nonprofit will almost always leave this box blank, but double-check the requirements for backup withholding just in case.

4. Provide Your Nonprofit’s Mailing Address

In Boxes 5 and 6, you’ll write out your organization’s mailing address so the requester of the W-9 knows where to send your 1099 when it’s ready. This can be a physical address or a P.O. box, wherever your nonprofit primarily receives mail.

5. Fill in the Requester’s Name and Address If Desired

Next to the address box, there is an option to provide the requester’s name and address. Although this is optional, it can help you keep track of who has access to your organization’s information, especially if your nonprofit frequently completes W-9s for different contracting organizations.

6. List Account Numbers Based on the Requester’s Directions

Some contracting organizations use numbered systems to track payments to their various contractors. If they ask that your nonprofit include its designated account number on its W-9 for internal reference purposes, list it in Box 7. If not, leave this section blank.

7. Write Your Taxpayer Identification Number (TIN)

Lastly (and arguably most importantly), you’ll fill in your nonprofit’s taxpayer identification number (TIN) in the designated area on your W-9. While individual contractors use their Social Security number, organizations like yours use their employer identification number (EIN).

If you haven’t applied for an EIN yet, you’ll need to do so before completing any W-9 forms and write “applied for” in the TIN section. Then, you’ll have to submit your EIN to the requester within 60 days of sending in your W-9.

Nonprofit W-9 Next Steps

Once you’ve completed and thoroughly reviewed your nonprofit’s W-9, all you have left to do is send it back to the requester. They’ll use your information to complete your 1099 and send it to you by the January 31 deadline.

If you’re on the receiving end of a W-9 from a contractor, your next step is to complete their 1099. For this form, you’ll find some key information on the W-9 and other details in your nonprofit's financial records:

Table explaining which information on Form 1099 can be found on a nonprofit W-9 and which data is in your nonprofit’s records.
  • From the contractor’s W-9: Their name, address, tax classification, and TIN.
  • From your nonprofit’s records: The category of payments made to the contractor, federal and state tax withholding information, and their total non-employee compensation.

Make sure to file your nonprofit’s W-9s in a safe place, preferably your accounting platform. This will help you maintain an organized system and ensure sensitive information remains secure. Keep W-9s on file as long as your relationship with a contractor is active and for at least four years after filing their 1099, and ensure this is reflected in your organization’s record retention policy.

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Of the various tax forms your nonprofit may need to complete, the W-9 is one of the least challenging once you get started. However, like any other official document, correctly filling it out is critical. Keep the tips above in mind as you fill out or request W-9s for your organization, and don’t hesitate to reach out to a nonprofit accountant (like the team at Jitasa!) if you need help or have any questions.

For more information on nonprofit taxes and record management, check out these resources:

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