How to Complete a Form W-9 for Nonprofit Organizations: Step-by-Step Instructions
Completing a Form W-9 is important for nonprofits to stay compliant. You may feel overwhelmed with the amount of forms your organization needs to stay on top of in order to operate properly. We don't blame you, there is a lot to keep track of and it can by a scary feeling to forget to fill out an important document.
On the bright side, the Form W-9 is a relatively simple form to complete. In this article, we will cover what the form is, when you need to complete it, and a step-by-step guide to help you complete it.
By the time you finish this article, you'll be fully prepared to fill out the W-9 Form on your own. Once you fill it out once, you'll realize how uncomplicated the process is.
Let's get started.
What is the Form W-9 for Nonprofits?
The Form W-9 for nonprofits is a necessary document used to provide your organization's taxpayer identification number (TIN) to other requesting organizations.
This form, also known as the 'Request for Taxpayer Identification Number and Certification,' serves as a means of transferring your nonprofit's TIN to the requesting party. Your TIN, which is the same as an Employer Identification Number (EIN) for nonprofits, is obtained through the filing of IRS Form SS-4.
When completing the Form W-9, you'll be required to provide various details about your organization. This includes the name of your nonprofit, its address, the type of entity it is, and of course, the organization's TIN.
To access the Form W-9, you can visit the IRS website where you have the option to either print it and fill it out manually or complete it digitally. By accurately completing and submitting this form, you'll ensure that other organizations have the necessary information to properly identify your nonprofit for tax purposes.
Reasons Your Nonprofit Might Need to Fill the Form W-9
To understand why your nonprofit might need to fill out the Form W-9, it's important to consider the various scenarios in which other organizations may require your taxpayer identification number (TIN) and accompanying information.
One common reason for needing the Form W-9 is if you're receiving a payment from another organization. In this case, the organization making the payment needs your TIN for reporting purposes.
Additionally, if there are any real estate transactions between your nonprofit and another organization, the Form W-9 may be necessary to report these transactions to the IRS. Similarly, if your nonprofit is involved in the payment of a mortgage, the organization receiving the payment will likely require your TIN.
Other situations that may require the Form W-9 include the acquisition or abandonment of property, debt cancellation, and contributions to an Individual Retirement Account (IRA). In all these cases, the requesting organization needs your TIN to accurately report these transactions to the IRS.
There are more cases in which you will need to fill out a Form W-9. For a complete list of scenarios, please visit the IRS website or contact a member of our team to get more information.
When Does Your Nonprofit Need to Fill Out a W-9?
If your nonprofit has engaged in a transaction with a total value exceeding $600, you'll need to fill out a Form W-9. This form is essential for providing the requesting organization with your taxpayer identification number (TIN) and other necessary details.
Here are three instances when your nonprofit needs to fill out a Form W-9:
Payments for services rendered: If your nonprofit has provided services to another organization and the total payment for those services exceeds $600, you'll need to fill out a Form W-9. This includes any consulting, professional, or other services your nonprofit has offered.
Rent or lease payments: If your nonprofit owns property and receives rent or lease payments from another organization that total more than $600, you'll need to complete a Form W-9. This applies to any real estate or equipment rentals.
Royalties or other income: If your nonprofit earns royalties from intellectual property, such as copyrights or patents, or receives any other type of income that exceeds $600, you'll need to provide the necessary information through a Form W-9.
What Happens If You Don’t Fill Out a W-9?
Refusing to provide your taxpayer identification number (TIN) via the Form W-9 can result in the requester withholding taxes from your pay at a rate of 24%. This means that if you don't fill out the W-9, a significant portion of your income will be deducted and paid to the government as taxes.
The requester has the authority to do this in order to comply with tax regulations and avoid potential fines.
By not submitting the W-9, you're essentially giving the requester no choice but to withhold taxes from your payments. This is because they can face penalties if they fail to obtain the necessary tax information from you. The IRS takes the accuracy of tax reporting seriously, and it's the responsibility of both the requester and the payee to ensure compliance.
It is important to understand that the purpose of the W-9 is to facilitate accurate reporting of income and ensure that taxes are properly withheld. Failing to provide the required information can lead to complications for both parties involved.
Therefore, it's in your best interest to promptly and accurately fill out the Form W-9 when requested by a legitimate organization.
Step-by-Step Form W-9 Walkthrough for Nonprofits:
Now let's get to the important part, completing the form.
To complete Form W-9 for your nonprofit organization, follow these step-by-step instructions:
1. Input the legal name associated with your EIN
To correctly complete Form W-9 for nonprofit organizations, you'll need to input the legal name that was registered with the IRS when obtaining your EIN/TIN. Here are some important points to keep in mind when entering this information:
Use the exact legal name: It's crucial to enter the nonprofit's legal name exactly as registered with the IRS. Any discrepancies may lead to errors or delays in processing.
Check your records: Double-check your organization's records to ensure you have the correct legal name. This may include reviewing your Articles of Incorporation or other official documents.
Update if necessary: If your nonprofit has changed its legal name since obtaining the EIN/TIN, you'll need to update it with the IRS before completing Form W-9.
2. Input the name associated with your entity
When completing Form W-9 for nonprofit organizations, you'll need to input the name associated with your entity, which may include a DBA if your organization operates under a different name. Box 2 of the form is where you'll include this information.
If your organization has a 'doing-business-as' (DBA) name that's legally recognized and different from the name in Box 1, you should enter it in Box 2. However, if your organization doesn't have a DBA, you can leave Box 2 empty.
It's important to accurately input the name associated with your entity to ensure that the information provided on the form is correct and matches your organization's records.
3. Select your entity type
To proceed with completing Form W-9 for nonprofit organizations, the next step is to indicate your entity type.
Check the box marked 'other' in Box 3 of Form W-9.
Write 'Nonprofit corporation exempt under IRS Code Section _' in the space provided. Fill in the blank with the appropriate code section number for your organization's tax exemption, such as 501(c)(3).
Make sure to include the specific code section number that applies to your nonprofit's tax-exempt status. This will help ensure accurate and proper identification of your entity type.
4. Enter your exempt payee code (if applicable)
If applicable, enter your exempt payee code when completing Form W-9 for nonprofit organizations, ensuring accuracy and proper identification of your entity.
However, if you're a tax-exempt nonprofit under 501(c), you should leave this box blank.
The exempt payee code is a four-digit number that identifies the type of exempt organization you are.
It's crucial to enter the correct code to avoid any issues or delays in processing your form.
The IRS provides a list of exempt payee codes, and you must select the one that best represents your organization.
Double-check the code to ensure accuracy and alignment with your nonprofit's tax-exempt status.
5. Input the address of your organization
Now that you have entered your exempt payee code, let's move on to inputting the address of your organization on Form W-9 for nonprofit organizations.
To complete this section, follow these steps:
Box 5: Enter your organization's street number, street name, and interior number, if applicable. Make sure to provide accurate and complete information to ensure proper delivery of any correspondence.
Box 6: Enter your organization's city, state, and zip code. Double-check the accuracy of this information to avoid any potential issues or delays.
Optional requester's name and address: If you want to provide the requester's name and address, you can do so in the unnumbered box provided. This isn't required but can be helpful for record-keeping purposes.
7. Provide account numbers (if applicable)
You have the option to include account numbers, if applicable, in Box 7 of Form W-9 for nonprofit organizations. This box is used to provide any account numbers that your employer might need for their records.
However, it's important to note that listing account numbers is optional and not required by the IRS. If you choose to include account numbers, make sure to enter them accurately and double-check for any errors.
Providing the correct account numbers can help ensure that your employer has the necessary information to process payments or other financial transactions accurately. If you're unsure whether or not to include account numbers, it's always a good idea to consult with a tax professional for guidance.
8: Enter your TIN
To accurately complete Form W-9 for nonprofit organizations, enter your IRS-issued EIN in Box 8, as it's a requirement for nonprofit status. Here are some important points to consider when entering your TIN:
Use your EIN: As a nonprofit organization, you can't proceed without an EIN number. Make sure to enter it in Box 8 and leave the Social Security number box empty.
Verify your EIN: Double-check that the EIN you enter is correct. It's crucial to avoid any errors as it can cause delays or complications down the line.
Keep your EIN private: Protect your organization's sensitive information by only sharing your EIN with trusted parties. Avoid disclosing it to anyone who doesn't require it for legitimate purposes.
9: Provide certification
In the certification section of Form W-9 for nonprofit organizations, you'll provide your signature and the date to confirm the accuracy of the information provided and your compliance with certain requirements. This section, labeled 'Part II,' serves as a declaration that the information you have provided is true and that you aren't subject to backup withholding.
Additionally, by signing and dating the form, you're certifying that you're a U.S. citizen or a U.S. person. It's important to ensure that any codes entered in this section are correct.
Providing your signature and the date is the final step in completing Form W-9, indicating your agreement to the accuracy of the information provided.
10. Submit the Form W-9 to the requester (Not the IRS!)
To complete the Form W-9 process for nonprofit organizations, the final step is to submit the form to the entity that requested it, rather than sending it to the IRS.
Here's what you need to know about submitting the Form W-9:
Double-check the accuracy: Before submitting the form, make sure all the information provided is accurate and up-to-date. Check the spelling of your name, your taxpayer identification number (TIN), and other details to avoid any potential errors.
Delivery method: Determine the preferred delivery method for the entity that requested your W-9. They may ask for the form to be submitted electronically, through email, or by mail. Follow their instructions carefully to ensure proper submission.
Retain a copy: It's always a good idea to keep a copy of the completed Form W-9 for your records. This can come in handy for future reference or if any questions arise regarding your information.
Need More Help Completing Form W-9?
Completing the Form W-9 is an important task for nonprofit organizations. It ensures that the organization's information is accurately provided to the Internal Revenue Service (IRS) for tax purposes.
Failing to fill out the form can lead to penalties and complications for the nonprofit. By following the step-by-step walkthrough provided, nonprofits can easily complete the Form W-9 and fulfill their tax obligations.
If you still feel like you need help or more information on how to fill out the form, feel free to contact a member of our team to get the assistance you need. We are here to help!
