Nonprofit Organization and A W9 Form: To Complete or Not

A nonprofit organization (or non-business entity) doesn’t distribute surplus income to owners or shareholders. The thing is, its revenue is used to achieve its mission. This kind of entities usually has specific tax benefits since governments treat it as supporting or charitable activities which aim to help the community.

Some non-profits may pay to their members. However, many organizations consist of volunteers who don’t get paid for the services they provide. In case your NPO provides services to another corporation or business you may be asked to complete a W-9 Form (Request for Taxpayer Identification Number and Certification). This document is issued to paid employers to record their personal information and taxpayer identification number. The data has to be submitted to the hirer to facilitate 1099 Form reporting at the end of fiscal year. The final destination of the form is the Internal Revenue Service.

The procedure is important to identify the business or individual who were paid.

If your nonprofit organization is asked to fill out the W-9 Form, you have to take it seriously and fulfill the requirements.

How to Prepare The W-9 Form for A Nonprofit Corporation.

The entity asked you to complete the W-9 usually provides you with the blank template. In other cases, you may find it yourself on the IRS’s website. The instructions for W-9 for nonprofits are almost the same as for individuals and other organizations. Pay attention to the guideline below in case you have doubts regarding the way of the proper preparation:

  1. Provide the name of your nonprofit organization as it is shown on its tax forms.
  2. Enter the business name if your nonprofit refers to ‘dba’.
  3. For the federal tax classification check the box ‘other’ and write ‘Nonprofit corporation exempt under IRS Code Section…’ - insert the code section number.
  4. The box under ‘Exemptions’ is intended for certain types of exemptions from backup withholding. Organizations of 501(c)(3) type have to leave this space blank.
  5. Indicate the address.
  6. Enter a nonprofit’s TIN also known as EIN (taxpayer identification number or employee identification number). In case you still have no TIN, file form SS-4 to obtain one. If you have applied for TIN but haven’t received it yet, just write ‘applied for’.
  7. Sign and put the date. In case you prepare the w9 form electronically, place your signature by drawing, typing or uploading it from the device.

Before certifying the document, check attentively all the provided data and correct errors if found any.

How to Submit The W-9 Form?

Once you have finished, file the completed W-9 to the entity requested it. You don’t have to send it directly to the IRS as this is your payer’s obligation. The hirer will retain the document till the end of fiscal period to submit it along with other necessary forms to the Internal Revenue Service.

Note that the Form is an important tax document that can’t be ignored or treated negligently.