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1099s for nonprofits and churches: tax-exempt isn't 1099-exempt

Nonprofits report what they pay others just like any business. Pick a payment to see which form it needs, from contractors and board fees to speakers, volunteers and raffle prizes.

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Short answer

Yes, nonprofits file 1099s: the IRS treats a nonprofit as engaged in a trade or business for 1099 purposes, even though it's tax-exempt. Contractors, speakers' honoraria and non-employee directors' fees go on Form 1099-NEC once a payee reaches $2,000 for 2026 ($600 in 2025); rent and non-service prizes go on Form 1099-MISC. Raffle prizes of at least $2,000 and 300 times the ticket price go on Form W-2G. Expense reimbursements under an accountable plan aren't reported, and employees, including employed clergy, get a W-2.

  • Directors' fees: 1099-NEC box 1a, even after retirement
  • Scholarships that aren't for services aren't reported on a 1099
  • Nonprofits are exempt payees: give payers a W-9 with code 1
  • 10 or more returns in total, including W-2s, must be e-filed

Last reviewed against the IRS Instructions for Forms 1099-MISC/NEC (Rev. December 2026) and W-2G (Rev. January 2026).

We paid…

Nonprofit payments, one by one

Contractors and professionals (bookkeeper, web designer, cleaner, consultant)

1099-NEC

  1. Report on 1099-NEC once the year's total reaches the threshold ($600 for payments in 2025, $2,000 in 2026 and later).
  2. Corporations are generally exempt, except attorneys.

Same rules as any business: a nonprofit's activities count as a trade or business for 1099 purposes.

On IRS.gov: Form 1099-NEC, Instructions for Forms 1099-MISC and 1099-NEC

Board members' or directors' fees

1099-NEC

  1. Fees paid to non-employee directors for their service are nonemployee compensation, reported on 1099-NEC, box 1a, including fees paid after a director retires.
  2. Reimbursing a director's actual, documented expenses isn't income and isn't reported.

On IRS.gov: Form 1099-NEC

Speakers, honoraria and guest presenters

1099-NEC

  1. An honorarium is payment for services, so it goes on 1099-NEC once the speaker's total reaches the threshold.
  2. Collect a W-9 before the event; it's much harder afterwards.

Paying a foreign speaker? They need a W-8BEN instead, and work done in the U.S. may require withholding.

On IRS.gov: Form W-9, Form W-8BEN

Guest ministers, musicians and supply clergy

1099-NEC or W-2

  1. Guest ministers and musicians who aren't your employees get a 1099-NEC once they reach the threshold.
  2. Your own employed pastor or staff get a W-2. Ministers have special rules for housing allowances and self-employment tax, so check with a tax professional.

On IRS.gov: Form 1099-NEC, Form W-2

Volunteers: reimbursements and stipends

Depends

  1. Reimbursements for documented expenses under an accountable plan aren't income and aren't reported.
  2. Flat stipends or allowances not tied to actual expenses are generally taxable, and may need a 1099-NEC (or a W-2 if the person is really an employee).

On IRS.gov: Publication 15 (accountable plans)

Prizes, awards and raffle winnings

1099-MISC or W-2G

  1. Non-cash or cash prizes and awards that aren't for services go on 1099-MISC, box 3, once they reach the threshold.
  2. Raffle prizes go on Form W-2G when they're at least $2,000 (for 2026) and at least 300 times the ticket price; prizes over $5,000 also need 24% withholding.

Awards to your own employees are generally wages, reported on their W-2.

On IRS.gov: Form 1099-MISC, Form W-2G, Instructions for Forms W-2G and 5754

Rent for event space, offices or equipment

1099-MISC

  1. Rent paid to a non-corporate landlord goes on 1099-MISC, box 1, once it reaches the threshold.
  2. Rent paid through a real estate agent or property manager is reported by them, not you.

On IRS.gov: Form 1099-MISC

Grants and scholarships to individuals

Usually no 1099

  1. Scholarships and grants that aren't payment for services generally aren't reported on a 1099 by the grantor.
  2. A grant paid for teaching, research or other services as a condition of the grant counts as wages and goes on a Form W-2. Ask a tax professional about your specific program.

A simple routine for small nonprofits

  1. Get a W-9 from everyone you pay who isn't an employee, before the first check. Our W-9 request generator writes the email.
  2. Check the TINs with the TIN format checker or the vendor list checker.
  3. At year end, total each payee and run doubtful cases through Do I need to file a 1099?
  4. File by January 31. If you'll file 10 or more information returns in total, including W-2s, you must e-file.

Related tools

Sources

Questions

Nonprofit 1099 questions

Do nonprofits have to file 1099s?

Yes. Being tax-exempt doesn't exempt an organization from reporting what it pays others. For 1099 purposes a nonprofit's activities count as a trade or business, so it files 1099-NECs for contractors and 1099-MISCs for rent, prizes and similar payments, just like a for-profit business.

Do churches have to issue 1099s?

Yes, for non-employees such as guest speakers, musicians, contractors and supply clergy who reach the reporting threshold. Employed pastors and staff get W-2s.

Does a nonprofit get a 1099 from the businesses it works with?

Generally no. Tax-exempt organizations are exempt payees, so payers don't need to send them 1099s for most payments. Give payers a W-9 with exempt payee code 1.

Are board members employees?

Usually not, when it comes to their board service. Fees paid to non-employee directors go on Form 1099-NEC. A director who is also an employee in a separate role gets a W-2 for those wages.

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