IRS Form 1099 is a federal tax form used to prepare and file income information that's separate from wages, salaries, or tips. Nonprofits issue it to independent contractors and vendors who complete work for the organization and file a copy with the IRS. Nonprofits typically use Form 1099-NEC (Nonemployee Compensation) for independent contractors or freelancers and Form 1099-MISC (Miscellaneous Information) for other types of vendors.

Understanding Form 1099 for Nonprofits & How to Issue One

Q: Can my nonprofit be issued a 1099?

Yes. Like any other organization, a nonprofit can act as a contractor, such as by consulting for another organization or renting out its event space. If the work meets the conditions for issuing a 1099, the contracting party will provide one, and you'll send it to the IRS with your annual tax return. Whether the income is taxable depends on whether the IRS considers it Unrelated Business Income (UBI) or part of furthering your mission.

Q: What is the filing deadline for nonprofit 1099s?

The deadline for a nonprofit to complete all of its 1099s for the previous calendar year is January 31. Nonprofits must also complete and file IRS Form 1096, which summarizes all of the 1099s the organization issues, by January 31.

Q: What happens if my nonprofit files its 1099s late?

IRS penalties apply to each late or missing form. For 1099s that cover 2026 (due January 31, 2027), the penalties are $60 for filing up to 30 days late, $130 for filing more than 30 days late and before August 1, $340 for filing on or after August 1, and $680 for intentional failure to file.

Tuesday, September 29, 2026 by Jon Osterburg

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At the end of every year, your nonprofit provides every full- and part-time employee on its recurring payroll with an individual W-2 to report annual withholdings and help them file their taxes. But what about contractors—i.e., individuals you’ve paid for specialized services on an as-needed basis?

If you’ve hired independent contractors, you may need to issue them a 1099 instead. In this guide, you’ll learn everything you need to know about 1099s for nonprofits, including:

Form 1099 for Nonprofits FAQ
Conditions for Issuing Nonprofit 1099s
How to File 1099s for Nonprofits

Although leveraging outsourced accounting services (like those provided by Jitasa!) saves your team time and improves accuracy as you issue 1099s, it’s still important for you as a nonprofit professional to know what these forms are and how they’re used. Let’s get started by answering some common questions about 1099s in a nonprofit context.

Form 1099 for Nonprofits: Frequently Asked Questions

What is Form 1099?

IRS Form 1099 is a federal tax form used to prepare and file income information that’s separate from wages, salaries, or tips. Nonprofits like yours need to issue this form to independent contractors and vendors who complete work for your organization and file a copy with the IRS.

There are two types of 1099s you should be aware of: Form 1099-NEC (Nonemployee Compensation) and Form 1099-MISC (Miscellaneous Information), which are both shown below. Your organization will typically use Form 1099-NEC when working with independent contractors or freelancers and Form 1099-MISC with other types of vendors. However, these forms are easily confused, so it’s best to ask an accountant if you’re unsure about which one you need to complete.

Sample versions of Form 1099-NEC and Form 1099-MISC as described above.

What is contracting for nonprofits?

Nonprofit contracting involves partnering with an external professional to complete projects that require specialized skills outside your existing employees’ expertise. For instance, you might contract a web developer to redesign and relaunch your nonprofit’s website or a construction company to renovate your facility.

Of course, hiring is essential if you want to grow your organization, but you should be strategic about when and why you hire new employees. Recruiting, onboarding, compensating, and retaining large staff teams can quickly become expensive. So, it’s best to only bring on new full-time team members when you know you have enough space in your budget and a long-term workload that justifies doing so. In the meantime, you can save money by working with contractors on short-term responsibilities.

When you work with a contractor, carefully track all relevant information about the work they did for your organization and your payments to them, and securely store the W-9 they completed for you at the beginning of your relationship (more on this later!). This data will be useful if and when you need to issue 1099s.

Can my nonprofit be issued a 1099?

The short answer is yes. The long answer is that income reported on a 1099 may or may not be taxable, but the IRS needs to know about it either way.

Like any other organization, your nonprofit can act as a contractor. For example, if a new nonprofit in a similar vertical to yours is getting started, the founder might contract your organization to consult on the launch process. Or, if your facility has a space that works particularly well for hosting events, other organizations might rent it out and create contracts with you for that purpose.

If your nonprofit’s contract work meets the conditions for issuing a 1099 (more on these later, too!), the contracting organization or individual will need to provide you with one, and you’ll need to send it to the IRS along with your annual tax return. Whether it’s taxable or exempt will depend on if the IRS considers it Unrelated Business Income (UBI) or just another part of furthering your organization’s mission.

What is the filing deadline for nonprofit 1099s?

The deadline for your nonprofit to complete all of its 1099s for the previous calendar year is January 31. Each contractor will need their 1099 to file their taxes, so their forms need to be ready several months before any other individual or organizational tax deadlines.

When you purchase 1099s for your nonprofit, you’ll also receive a copy of IRS Form 1096 and related instructions. This form essentially summarizes all of the 1099s your organization issues, and you’ll need to fill it out and file it by January 31 as well.

What happens if my nonprofit files its 1099s late?

If your nonprofit fails to complete its 1099s by the January 31 deadline, you can face IRS penalties that apply to each late or missing form. Here is a breakdown of the late fees for 1099s that cover 2026 (due January 31, 2027):

$60 penalty for filing up to 30 days late
$130 penalty for filing more than 30 days late and before August 1
$340 penalty for filing on or after August 1
$680 penalty for intentional failure to file

These fees can really add up depending on how many 1099s you have to file, so make sure to complete them correctly and on time!

Dive deeper into 1099s for nonprofits in our FREE online course!

Conditions for Issuing Nonprofit 1099s

Now that you understand the basics of 1099s, the one question that may still be on your mind is when to complete one of these forms. Generally speaking, you’ll need to issue Form 1099 when the following four conditions apply to a contracting situation:

Four conditions for issuing 1099s for nonprofits, which are listed below.

The payment recipient is not your nonprofit’s employee.
The payment recipient is an individual, partnership, vendor, or estate.
The payment was made for services to your organization.
Total payments during one calendar year amount to at least $2,000.

Let’s say you contracted a freelance graphic designer to create marketing materials for your nonprofit’s GivingTuesday campaign. They worked for your organization from August to November of this past year, and you paid them $5,000 over that time period. In this case, you would definitely need to file a 1099. They’re an individual who isn’t your employee, and they provided a service to your nonprofit that you paid more than $2,000 for in one calendar year.

Besides understanding when you should issue a 1099, it’s just as important to know when it isn’t required. Here is a non-exhaustive list of payments for which your nonprofit doesn’t need to complete Form 1099-NEC or 1099-MISC:

Most payments to corporations (although there are always exceptions)
Payments for merchandise, computers, storage, and similar items
Wages paid to employees (report on Form W-2)
Disbursements of scholarships and fellowship grants (report on Form W-2)
Military differential wage payments made to employees while they are on active duty in the Armed Forces or other uniformed services (report on Form W-2)
Business travel allowances paid to employees (report on Form W-2)
Payments that fall under your expense reimbursement policy
Cost of current life insurance protection (report on Form W-2 or Form 1099-R)
Payments to tax-exempt trusts (IRAs, HSAs, Archer MSAs, and Coverdell ESAs), federal and state governments (including the governments of the District of Columbia and of U.S. possessions), or a foreign government

Form 1099 may seem a bit confusing at first glance, but if you follow the guidelines above, it should be easy to determine when to complete one. If you want to put this decision-making process into practice with a specific situation at your nonprofit, you can take the quick quiz below!

QUIZ: Does Your Nonprofit Need to Issue a 1099?

Think about a specific independent contracting situation your organization is currently in, then answer Yes or No to each question accordingly.

Question of

How to File 1099s for Nonprofits

The IRS opened e-filing for Form 1099 in 2023, and if your nonprofit issues 10 or more 1099s in one year, you’re required to file them electronically. Every 1099 comes with five copies: two for your organization to file with the IRS and your state government, respectively; one for you to keep for your records; and two for the contractor to file with their federal and state tax returns.

To complete your 1099s, your nonprofit needs to accurately track all payments to contractors in your bookkeeping system and obtain W-9s from each individual contractor. Let’s look more closely at what information comes from each source on Form 1099.

A table of information you need to gather from W-9s and internal records to file 1099s for nonprofits, which is explained in the following sections.

Information From Form W-9

IRS Form W-9 is a simple form that contracted workers fill out to provide your nonprofit with the necessary information to issue them a 1099. It also allows the IRS to match each Form 1099 your organization files to the right contractor’s tax returns. A W-9 is only one page long and typically looks like this:

A sample version of Form W-9, which is described below.

On a contractor’s W-9, you can find the following information that you need for their 1099:

Business and/or individual’s name and address
Contractor’s tax status
Social Security Number (for sole proprietorships and individuals) or Tax ID Number (for applicable business entities)

We recommend asking contracted workers to fill out their W-9 at the beginning of your working relationship with them to save your organization time and energy come tax season. Keep W-9s on file as long as your relationship with a contractor is active and for at least four years after filing their last 1099.

Information From Your Nonprofit’s Records

Once you’ve pulled the details you need from Form W-9, find the following information in your nonprofit’s records to finish filling out Form 1099:

The category of the payments made to the contractor
Federal and state tax withholding information
The total non-employee (or miscellaneous) compensation the contractor received

While Form 1099 is fairly short, it’s important to get the details right. On top of late filing fees, there are also penalties for errors or omissions. Before getting started, take a moment to confirm that you have all of the information you need and fill in any gaps you may find.

By becoming familiar with what Form 1099 entails and why to issue one, you’ll be better equipped to maintain compliance when it comes to your organization’s contracted workers, and you might just find filing these forms a bit less taxing. However, it always helps to have experts on your side—like Jitasa’s experienced nonprofit accounting team!

For more information on filing your nonprofit’s tax forms, check out these resources:

How to Fill Out Form W-9 for Nonprofits: Complete FAQ Guide. Dive deeper into the requirements and best practices for requesting taxpayer information from contracted workers using Form W-9.
Nonprofit Form 990 Filing: Comprehensive FAQ Guide. Discover everything you need to know about filing your nonprofit’s most important annual tax form—IRS Form 990.
12+ Top Nonprofit Accounting Firms & How to Choose One. Explore the benefits of working with an outsourced nonprofit accountant during tax season and beyond, as well as our top recommendations.

Jitasa accountants prepare 20,000+ 1099s for nonprofits every year—and we're ready to help with your organization's, too!