Do Nonprofits Get a 1099? Exceptions, Issuing, and Deadlines

Do nonprofits get a 1099? Generally no — tax-exempt organizations are specifically excluded from information return reporting, so payers usually don’t send them a 1099. The flip side matters just as much: your nonprofit must issue 1099s to contractors, board members, and other non-employees you pay $600 or more during the year.

Why Payers Usually Don’t Send Your Nonprofit a 1099

The IRS instructions for Forms 1099-MISC and 1099-NEC list “payments to a tax-exempt organization” among the categories that do not require reporting.¹ If your organization holds tax-exempt status under Section 501(c) of the Internal Revenue Code, payers generally have no obligation to issue you a 1099 for services you provide.

Most nonprofits also get a second layer of protection. The vast majority of tax-exempt organizations are incorporated, and the IRS does not require 1099 reporting for payments to corporations.¹ Between the two rules, a nonprofit paid for ordinary services like consulting, training, or event management should not expect a 1099 from the payer.

The Medical and Legal Exceptions

Two carve-outs pull nonprofits back into 1099 reporting. If your nonprofit provides medical or health care services, the payer must report those payments on Form 1099-MISC, Box 6, even though you’re a corporation. The same rule applies to legal services: attorney fees paid to a nonprofit law firm get reported on Form 1099-NEC regardless of corporate status.¹

A nonprofit hospital billing for patient care, a tax-exempt health clinic, or a legal aid organization receiving fees for representation can all expect 1099s under these exceptions. If you operate in either space, expect payers to request a completed W-9 and issue a 1099 at year-end.

One common misconception: rent payments to a nonprofit are not one of these exceptions. The IRS does not carve rent out of the corporate exclusion the way it does for medical and legal payments.

When Your Nonprofit Has to Issue 1099s

Your 501(c) status gives you no pass on the other side of the transaction. The IRS treats tax-exempt organizations as engaged in a trade or business for information reporting purposes.¹ If you pay $600 or more during the calendar year to a non-employee for services performed in the course of your operations, you must file Form 1099-NEC.²

The obligation covers payments to sole proprietors, partnerships, and LLCs taxed as sole proprietorships or partnerships. You do not need to issue a 1099-NEC to a C corporation or S corporation, unless the payment is for medical or legal services.³

Board Member Fees

Board compensation catches many nonprofits off guard. The IRS defines corporate directors, including nonprofit board members, as statutory non-employees.⁴ If you pay directors stipends, meeting fees, or any other compensation for their service as directors, that money is reported on Form 1099-NEC — not on a W-2. This is the most common statutory non-employee relationship at tax-exempt organizations, and missing it is an easy way to pick up a penalty.

Rent, Royalties, and Prizes

Some payments belong on Form 1099-MISC instead of 1099-NEC. The most common for nonprofits are rent payments of $600 or more for office or event space, royalties of $10 or more, and prizes or awards of $600 or more paid to individuals.⁵ If your nonprofit runs a raffle or contest with cash prizes, those awards likely need to be reported.

Payments That Don’t Require a 1099

Several common nonprofit transactions fall outside 1099 reporting.

Payments made through a credit card, debit card, or third-party payment network like PayPal. The payment processor handles reporting on Form 1099-K, so you don’t issue a 1099-NEC for the same transaction. Only payments by check, cash, ACH transfer, or wire trigger a 1099-NEC obligation.⁶
General-purpose grants your nonprofit makes to another 501(c)(3). These get documented on Schedule I of Form 990, not on a 1099.
Charitable donations, in either direction. Contributions are not payments for services.
Payments to C or S corporations for non-medical, non-legal services.
Employee wages, which go on Form W-2.

The credit card exception is the one nonprofits most frequently overlook. If your accounting system flags every vendor who received $600 or more, make sure it separates out credit card payments before you generate your 1099 batch. Double-reporting a payment on both a 1099-NEC and a 1099-K creates matching problems for the recipient and can generate IRS notices.

Collect the W-9 Before You Pay

Before you can file any 1099, you need the payee’s taxpayer identification number. Form W-9 collects the vendor’s name, address, federal tax classification, and TIN (either a Social Security number or an Employer Identification Number).⁷ The tax classification line tells you whether the vendor is a sole proprietor, partnership, LLC, or corporation, which determines whether a 1099 is required at all.

Collect the W-9 before making the first payment, not at year-end. If a vendor refuses to provide a TIN or provides one the IRS flags as incorrect, you must withhold 24% of the payment as backup withholding and remit it to the IRS.⁸ That requirement alone usually motivates a reluctant vendor to complete the form.

Filing Deadlines and Electronic Filing

The two forms have different due dates, which trips up organizations that file both.

Form 1099-NEC is due to both the recipient and the IRS by January 31, whether you file on paper or electronically.¹
Form 1099-MISC is due to the recipient by January 31, to the IRS by February 28 on paper, and to the IRS by March 31 if filed electronically.¹

If a deadline falls on a weekend or legal holiday, the due date shifts to the next business day.

Organizations filing 10 or more information returns of any type during the year — counting W-2s in the total — must file electronically.⁹ Most nonprofits clear this threshold quickly once W-2s and 1099s are combined. The IRS offers the FIRE (Filing Information Returns Electronically) system and the newer IRIS (Information Returns Intake System) taxpayer portal for electronic submission.

State Filing

Many states require their own copy of your 1099 filings. If you file through FIRE, the Combined Federal/State Filing Program can forward your 1099-NEC and 1099-MISC forms to participating states at no charge.¹⁰ States that don’t participate, or that use lower reporting thresholds, may require you to file directly with the state revenue agency. Check your state’s rules early. Discovering a state filing obligation in February doesn’t leave much runway.

Penalties for Late or Incorrect 1099s

The IRS assesses penalties per form, and they escalate the later you file. For returns due in 2026:

Filed within 30 days of the deadline: $60 per return.
Filed more than 30 days late but by August 1: $130 per return.
Filed after August 1, or not filed at all: $340 per return.
Intentional disregard: $680 per return, with no annual cap.¹¹

The same tiers apply separately to failing to furnish the correct payee statement, so a single missed 1099 can generate two penalties: one for the IRS copy and one for the recipient copy. Annual maximum caps limit exposure for organizations not acting with intentional disregard, with lower caps for small organizations whose average annual gross receipts are $5 million or less. Filing a wrong TIN or incorrect name carries the same tiered structure, so W-9 accuracy matters as much as timeliness.

Correcting a Filed 1099

If you discover an error on a 1099 you’ve already submitted — a wrong dollar amount, a wrong TIN, a wrong recipient name — file a corrected return as soon as possible. The method depends on how you filed originally: paper filers follow the correction procedures in the General Instructions for Certain Information Returns, and electronic filers use the correction process in whichever IRS system they used.¹ Send a corrected copy to the recipient as well so they can file their own return accurately. Catching the error early in the penalty window can reduce or eliminate late-filing penalties.

1
Internal Revenue Service. Instructions for Forms 1099-MISC and 1099-NEC (04/2025)
2
Internal Revenue Service. Am I Required to File a Form 1099 or Other Information Return?
3
Internal Revenue Service. Information Returns (Forms 1099)
4
Internal Revenue Service. Exempt Organizations: Who Is a Statutory Nonemployee
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Internal Revenue Service. About Form 1099-MISC, Miscellaneous Information
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Internal Revenue Service. Form 1099-K FAQs: Third Party Filers of Form 1099-K
7
Internal Revenue Service. Form W-9 Request for Taxpayer Identification Number and Certification
8
Internal Revenue Service. Publication 15 (2026), (Circular E), Employer’s Tax Guide
9
Internal Revenue Service. Filing Information Returns Electronically (FIRE)
10
Internal Revenue Service. Topic No. 804, FIRE System Test Files and Combined Federal/State Filing (CF/SF) Program
11
Internal Revenue Service. Information Return Penalties