When our Credit Union makes a sponsorhip to a Organization
On many occasions, our CU does financial sponsorships to various originations within the community. Almost every one of them is well over the $600 limit for 1099-Misc. But should we be asking for a W9 and sending a 1099-MISC for example to a tax-exempt organization when we donate $5000? Thanks!
Hi Coleman, Thanks for asking your tax question. This is quite an interesting situation.
The core rule for Form 1099-MISC reporting is that the organization paid $600 or more (in total during the year) to independent contractors, sole proprietors, and partnerships for services rendered.
If the $5,000 you mention is more in the nature of a donation to tax-exempt organization, then it’s not reported on a Form 1099. Instead, the details are reported on your credit union’s 990 as charitable donations.
Talk to your CPA. They can help you sort out what types of forms you need to be filing with the IRS.
I hope this helps!
Staff writer for FitSmallBusiness.com.