How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask R. Klein, EA Your Own Question
R. Klein, EA
R. Klein, EA, Accountant
Category: Finance
Satisfied Customers: 3375
Experience:  TurboTax Expert. QuickBooks Certified Pro Advisor
Type Your Finance Question Here...
R. Klein, EA is online now
A new question is answered every 9 seconds

Do I issue a 1099-MISC to a non-profit 501c3 orgranization

This answer was rated:

Do I issue a 1099-MISC to a non-profit 501c3 orgranization for services or medical & healthcare?

Non profits are usually set up as corporations. 1099 Rules indicate that corporations are exempt from receiving 1099 statements, EXCEPT for certain items which you must report on a 1099. Medical or Health care payments are reportable, but non-employee compensation (contractor payments) are not reported. A non-profit is considered to be engaged in a business or trade. Therefore, a 1099 IS REQUIRED to be sent for Medical payments.

If you are ever unsure, there is no penalty for sending a 1099 to someone who wasn't supposed to get one, but if you are required to send one and you don't, then you may be subject to a penalty. In other words, send a 1099 when unsure and you are always safe.

Source: 1099MISC instructions Page 1, Column 2.

Customer: replied 5 years ago.

1099MISC instructions Page 1, Column 2: doesn't that section refers to non-profits needing to issue 1099s, not necessarily if they should receive them?

But your answer makes sense in the fact that non-profits are set up as corporations (vs. sole proprietors, individuals, etc.) which I did not consider. Also, since attorneys and medical/healthcare are supposed to received 1099 regardless if they are a corporation or not, I will make sure I continue to issue 1099 for the medical/healthcare services (attorneys are never not-for-profit LOL!), but not for other services.

I greatly appreciate you answer. It was extremely helpful.

Best regards

When you are reviewing the citation, be sure to look a little higher up the column. It is easy to see the exception, but the bit about the non-profits is a little before that. You almost have to read the entire page.
R. Klein, EA and 2 other Finance Specialists are ready to help you
Customer: replied 5 years ago.
Thank you so much! You've greatly helped me and I appreciate it immensly!
Customer: replied 5 years ago.
Follow-up: Can you tell me if I should issue a 1099-MISC to a group home. (I should note that the issuer/payer is county government.) In your answer, it was decided that I should send 1099's to medical/healthcare services, but how about group homes?
Again, better safe than sorry. No penalty to send someone a 1099 that doesn't need it. Regardless, I would send one unless they meet an exception.
Customer: replied 5 years ago.
I'm overstepping now, and I apologize, but one more question: How about hotels that are not corporations? If so, rent or non-employee compensation?
I am not certain what service you are providing hotels. Unless the hotel operator did work for you not in the ordinary course of running a hotel, I am not certain why you would send a 1099. But certainly it would not be Box 7.
Customer: replied 5 years ago.
Just wondering about payments made to hotels for hotel rooms for employees for out of town stays.
You do not send 1099s for those type of payments. The IRS recognizes this as normal business.