IRS Form 1099-MISC

IRS Form 1099-MISC

 

The University is required to file Form 1099-MISC, Miscellaneous Income, for calendar year payments made for (1) at least $10.00 in royalties, or (2) at least $600.00 in rents, services (including parts & materials), prizes and awards, other income payments, medical/ health care payments and legal services. 

The University‘s reportable payments include:

 

  • Rents:
    • Machine rentals
    • Pasture rentals
    • Real estate rentals paid for office space unless paid to a real estate agent
  • Royalties:
    • Industrial
    • Literary
    • Patent
  • Other income: This category is for other income required to be reported on Form 1099-MISC that is not reportable in one of the other boxes on the form.
    • Prizes and awards that are not for services performed. (Include the fair market value of merchandise won if given in lieu of a cash award.)
    • Blood donors
    • Research subjects
    • Compensatory damages
  • Medical and health care payments:
    • Physician and other supplier/provider of medical or health care services.
      • If the provider is part of a corporation, list the corporation as the recipient instead of the individual.
        • Use the corporation’s Tax Identification Number and not the individual’s SSN.
      • Corporations are not excluded for medical/health care services. This income is reportable.
    • Medical transcriptions are not medical services, but are reportable under “Non employee compensation.”
  • Non employee compensation:
    • Includes fees for services performed, or other forms of compensation for services performed for the University by an individual who is not a University employee. If payment includes reimbursement for expenses, only the fees for services are reportable. Non employee compensation payments require their home or business address. The requesting University departmental address is not sufficient. If the following four conditions are met, a payment generally is reportable as non-employee compensation:
      • the payment was made to someone who is not a University employee
      • the payment was made for services in the course of the University’s trade or business
      • the payment was made to someone other than a corporation, e.g., an individual or a partnership
      • payments were made to the payee of at least $600.00 during the “calendar” year
    • Examples of payments reported under Non employee compensation are:
      • Professional service fees such as to attorneys, accountants, and architects
      • Payment for services, including parts or materials used to perform the services if supplying the parts or materials was incidental to providing the service
      • Payments to non-employee entertainers for services
      • Honorariums
      • Guest Lecturers
      • Independent Contractors
      • Legal Fees

Reimbursement payments to any of the above are reportable as Non employee compensation when receipts or documentation is not provided.

Exceptions to 1099 Reporting

The IRS does not require some payments to be reported on 1099-misc forms although they may be taxable to the recipient. These include: 

  • payments to a corporation (with the exception of medical/health care and legal fees)
  • payments for merchandise
  • payments of rent to real estate agents
  • wages paid to employees (report on form W-2)
  • scholarships and fellowships

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