W-9 Explanation

 

USAG must have a valid W-9 on hand for all Payees/Vendors. The information on the W-9 provides USAG with the tax identification number for the Payee and must match the information as reported to the IRS. USAG uses the information collected on the W-9 to report contractor earnings (if applicable) to the IRS on a 1099.

 

Download a blank W-9                         W-9 Instructions for the Requester

 

Process

 

Please collect W-9's from all new Payees and upload them to Dropbox. When a check request is submitted, we look the vendor up in our accounting software to see if we have a W-9 on file.

  • If we have a valid W-9 on file will proceed to enter the check request. We will check to see if there are any supporting documents needed for the payout (for example copies of invoices).
    • If we do not need supporting documents, then we will mark the check request as Processed.
    • If we are waiting on supporting documents, we will email the State/Region chairman to request the documents and mark the check request as "Waiting on Supporting Documents".
  • If we do not have a W-9 on file, then we will look for a corresponding W-9 in Dropbox. If there is no W-9 in Dropbox, then the National Office will mark the check request as "W-9 pending" and email the vendor (copying the State/Region chairman) requesting a W-9. The National office will make three attempts to contact the vendor and if, after 60 days, we have been unsuccessful at obtaining a W-9 USAG cancel the check request.

To speed up the check request process please upload all supporting documents (like W-9's, invoices, etc.) to Dropbox at the same time you enter the check request.

 

What makes a W-9 valid?

  • Type of entity box is selected, 
  • Tax identification number (like social security or employer id) is provided in the proper format (Correct SSN: 123-45-6789, Correct EIN: 12-3456789), and
  • Document is signed.

If we receive a non-valid W-9 we will return to sender and request the document to be completed fully.

 

1099 Explained

 

1099 Form – for informational purposes only                1099 Instructions

 

USAG must report all nonemployee compensation on a 1099 (see page 8 of the 1099 Instructions guide). USAG must mail 1099’s to Payees on or before January 31st. 

 

 
What is nonemployee compensation?

·       USAG made the payment to someone who is not an employee.

·       USAG made the payment for services in the course of our trade or business (including government agencies and nonprofit organizations).

·       USAG made the payment to an individual, partnership, estate, or, in some cases, a corporation.

·       USAG made payments to the payee of at least $600 during the year.

 

Important notes:

  • The IRS requires USAG to report all nonemployee compensation on the 1099. 
  • You only need to send supporting documents for Check Requests that are made payable to a Corporation. 
    • You do not need to send over mileage support document or copies of receipts.

 

 

USAG Corporate Card Purchases and 1099's

  • Do expenses put on a USAG Corporate credit card go twoards 1099 amounts? No.
  • If you make purchases on your personal credit card and USAG pays the vendor directly do those expenses go towards 1099 amounts? No.
  • If you make purchases on your personal credit card and USAG pays you as a reimbursement do those expenses go towards 1099 amounts? Yes.

This is because most (if not all) banks and credit card companies are established as 'Corporations' which are exempt from 1099 holdings. Using a USAG Corporate credit card to make purchases for your State & Region is a good way for you as the chair to aboid recieving a 1099 for those 'reimbursable' expenses at the end of the year. Just remember that if you have a USAG Corporate Card there are responsibilities tied back to the use of the card. 

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Therefore, effective January 1, 2019 the only supporting documents you need to send over are copies of actual invoices. You no longer need to send over copies of reimbursement receipts or mileage support documents because per the IRS guidelines we must include these expense reimbursement amounts on the 1099. When the Payee is filing their federal tax return, they can deduct their reimbursement and travel expense amounts from the 1099 that we provided them by completing the Schedule C for the 990.

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