W-9 for Nonprofits: Filling It Out, 1099s, and B-Notices

A nonprofit organization fills out Form W-9 for nonprofits any time a payer, bank, or grantor asks for one to document the organization’s legal name, EIN, and tax-exempt status. Section 501(c) status does not excuse you from the request. The form is an identity document, not a tax bill, and getting it right is what keeps payments from being hit with 24% backup withholding.

When Your Nonprofit Will Be Asked for a W-9

The most common trigger is being paid for services. If another business or organization hires your nonprofit to run a training, consult on a project, or provide any fee-for-service work, expect a W-9 request before the first check is cut. Payers collect the form upfront rather than chasing it down later once small payments accumulate across a year.

Financial institutions also require a W-9 when a nonprofit opens a bank account, investment account, or line of credit. Banks use the form to establish U.S. status and avoid the presumption that the account holder is a foreign person subject to withholding under FATCA and related rules.¹ That request has nothing to do with payment amounts; it is a standing regulatory requirement for account opening.

A W-9 is generally not needed for outright charitable donations or grants. A donor writing a check to support your mission is not paying for services, so there is no reportable transaction. Government agencies sometimes request a W-9 before issuing a grant as an administrative step, and there is no harm in providing one, but the grant itself does not typically generate a 1099. Purchases of merchandise, utility payments, and amounts settled through credit card processors are also outside the normal W-9 universe.

Filling Out the W-9 Line by Line

A missing field or wrong code can cause the payer to treat your organization as a taxable entity and trigger withholding you then have to chase down from the IRS. Work through the form deliberately.

Line 1: Legal Name

Enter the organization’s legal name exactly as it appears on your IRS determination letter and EIN assignment. The IRS matches the name against the number, and any mismatch causes the submission to fail. If your nonprofit operates under a widely known trade name that differs from its legal name, the trade name goes on Line 2, not Line 1.²

Line 3: Federal Tax Classification

Check the “Other” box and write in your specific classification, such as “nonprofit corporation” or “501(c)(3) tax-exempt organization.” Do not check the C Corporation or S Corporation boxes, even if your nonprofit is incorporated under state law. Those boxes are reserved for taxable corporate entities, and checking one could confuse the payer into treating you as a standard for-profit corporation rather than an exempt payee.

Line 4: Exempt Payee Code and FATCA Code

This is where your nonprofit formally tells the payer it is exempt from backup withholding. Enter the number 1 in the “Exempt payee code” space. Code 1 covers any organization exempt from tax under Section 501(a), which includes 501(c)(3), 501(c)(4), 501(c)(6), and other 501(c) subtypes.²

In the second space on that same line, enter the letter A for your FATCA exemption code. Code A applies to organizations exempt under Section 501(a), signaling that the organization is not a specified U.S. person for FATCA reporting.³ Leaving Line 4 blank is the single most common mistake nonprofits make on the W-9, and the one most likely to cause problems downstream.

Part I: Employer Identification Number

Enter your nine-digit EIN. This is the organizational equivalent of a Social Security Number. If your nonprofit does not yet have an EIN, apply for one through the IRS before completing the W-9. A personal Social Security Number should never appear on a W-9 submitted on behalf of an organization.

Part II: Certification

An authorized officer signs and dates Part II, certifying under penalties of perjury that the EIN is correct and the organization qualifies as an exempt payee. Electronic and fax submission are both accepted, provided an electronic system carries the same perjury statement as the paper form and ends with an authenticating electronic signature.¹

Single-Member LLCs Owned by a Nonprofit

Some nonprofits create single-member LLCs to hold property, run a social enterprise, or manage a specific program. For federal tax purposes, an LLC with a single owner is a disregarded entity, and the IRS looks through it to the parent. When that LLC receives a W-9 request, it must list the parent nonprofit’s name and EIN on Line 1. The LLC’s name goes on Line 2 as the “business name/disregarded entity name.”⁴

The tax classification, exempt payee code, and FATCA code all flow from the parent nonprofit, not the LLC. Entering the LLC’s own EIN or checking a different tax classification box is one of the fastest routes to a TIN mismatch notice and backup withholding.

How a Correct W-9 Affects the 1099 You Might Receive

A properly completed W-9 is usually your ticket out of 1099 reporting. When the payer sees exempt payee code 1 and a tax-exempt classification, it has the documentation it needs to skip issuing a 1099 for most payment types, including rent, service fees, and other compensation.³

Two exceptions override the exempt-payee exclusion:

Medical and health care payments. If your nonprofit provides medical services and receives $2,000 or more from a single payer in a calendar year, that payer must report the payments on Form 1099-MISC regardless of your exempt status. Tax-exempt hospitals and extended care facilities, along with government-operated hospitals, are carved out of this rule.⁵
Attorney fees and legal gross proceeds. Gross proceeds of $600 or more paid to an attorney in connection with legal services must be reported on Form 1099-MISC, even when paid to a corporation or exempt organization. This threshold did not increase for 2026.⁶

If your nonprofit runs a community health clinic or employs attorneys who generate legal fees for outside clients, expect 1099s on those revenue streams no matter what your W-9 says.

The 2026 Reporting Threshold

For tax years beginning after 2025, the general reporting threshold for most information returns rose from $600 to $2,000. That affects Form 1099-NEC (nonemployee compensation), Form 1099-MISC (rents, medical payments, and other categories), and other information returns. Royalties remain reportable at $10 or more, and attorney gross proceeds remain at $600.⁶ The $2,000 figure will be adjusted for inflation starting in 2027. Fewer payments will cross the reporting line, but the underlying W-9 collection process does not change; payers still ask upfront.

What Happens if the W-9 Is Missing or Wrong

Backup withholding is a flat 24% deduction the payer takes out of your payment and sends directly to the IRS.⁷ It applies when the payer cannot verify the payee’s identity, and it does not care about your tax-exempt status. A 501(c)(3) that fails to provide a W-9, or provides one with a wrong or missing EIN, gets hit the same as any for-profit vendor.

The two most common triggers for nonprofits are failing to return the W-9 at all, and submitting a form where the name and EIN do not match IRS records. Once either happens, the payer has no choice but to withhold. Your organization then has to file a return with the IRS to recover the withheld money, which can take months.

The B-Notice Process

When the IRS detects a name-and-TIN mismatch, it notifies the payer, and the payer then sends your nonprofit a “B notice” demanding a corrected W-9. On the first B notice, you can resolve the problem by returning a properly completed and signed W-9 with the correct information.⁸

A second B notice is harder to fix. A new W-9 alone is not enough. You must provide IRS Letter 147C, which independently verifies your organization’s name and EIN. To request Letter 147C, call the IRS Business and Specialty Tax line at 1-800-829-4933. Until the mismatch is resolved, the payer continues withholding 24% from every payment.

When to Send an Updated W-9

A W-9 has no expiration date, but certain changes require you to send a new one to every payer who has your old form on file:

Your legal name changes through a merger, rebranding, or restructuring.
Your EIN changes, which can happen if the organization dissolves and reforms or undergoes certain structural changes.
You lose your tax-exempt status and can no longer claim exempt payee code 1. You must notify any payer to whom you previously claimed exempt status if you expect to receive future reportable payments.²

Many payers ask for a refreshed W-9 every few years as a matter of practice. Complying is easy insurance against future mismatches.

When Your Nonprofit Collects W-9s From Others

The obligation runs both ways. When your nonprofit pays independent contractors, consultants, or freelancers, you are the payer and must collect a W-9 before making the first payment. For 2026, if you pay any single vendor $2,000 or more in nonemployee compensation during the calendar year, you must file Form 1099-NEC with the IRS and furnish a copy to the vendor by January 31 of the following year.⁶

If a contractor refuses to provide a W-9 or returns one without a TIN, you must begin backup withholding at 24% immediately on any reportable payment. There is no grace period for nonemployee compensation, even if the contractor claims to have applied for a TIN and is waiting on the IRS.³ If your organization hires outside help for events, bookkeeping, IT, or fundraising consulting, put a W-9 collection process in place before the first invoice arrives.

1
Internal Revenue Service. Instructions for the Requester of Form W-9
2
Internal Revenue Service. Form W-9 Request for Taxpayer Identification Number and Certification
3
Internal Revenue Service. Instructions for the Requester of Form W-9
4
Internal Revenue Service. Single Member Limited Liability Companies
5
Internal Revenue Service. Instructions for Forms 1099-MISC and 1099-NEC
6
Internal Revenue Service. 2026 Publication 1099 General Instructions for Certain Information Returns
7
Internal Revenue Service. Backup Withholding
8
Internal Revenue Service. Backup Withholding “B” Program