A W-9 form, when signed by the entity or individual, validates the legal name. It has to be the name recognized by the IRS tax identification number (TIN), which is the entity’s tax identification number or the social security number, if an individual.

The following people or entities complete the IRS Form W-9:

• People legally living in the United States (including resident aliens)
• Partnership, Corporation, Company, Association, Estate, or Domestic Trust which has been organized in the United States or under the laws of the United States.

To comply with Federal and State laws and regulations, the University must have a correct and complete W-9 on file before the University is allowed to issue a payment to the vendor. The university is required to report certain payments to the IRS. This form gathers all the pertinent information we need in order to comply with the IRS regulation.

“TIN” stands for “Tax Identification Number.” There are two types of Tax Identification Numbers:

•  Social Security Number (“SSN”): The SSN is assigned by the United States Internal Revenue Services (“IRS”) for individual U.S. citizens and resident aliens.
• Employer Identification Number (“EIN”): The EIN is assigned by the IRS for corporations and some other entities. The EIN also known as the Federal Tax Identification Number (commonly called a “Federal Tax ID”). So, the EIN and the Federal Tax Identification Number is the same number.

If a person is a nonresident alien or if the entity is a foreign entity (i.e. outside of the United States), the foreign person or foreign entity completes an IRS Form W-8.

Form 1099-MISC, Miscellaneous Information is the form Accounts Payable uses to report vendor payments to the IRS. Form 1099-MISC serves as a catch-all for miscellaneous forms of income that do not fit other tax forms. This form used to include nonemployee compensation, which was listed in box 7 of the form. The Form 1099-MISC will no longer be used to report nonemployee compensation. Form 1099-MISC, which is now titled Miscellaneous Information, will continue to be used for miscellaneous forms of income. Box 7 is now dedicated to reporting direct sales of at least $5,000. 

A Form 1099-MISC is sent to individuals or vendors who receive at least $10 in royalties and/or to individuals/vendors who received at least $600 in rents, prizes and awards, and other income payments. For more information, refer to the IRS website. 

Individuals or entities(vendors) which receive non-payroll payments made by Rowan University receive a 1099-MISC tax form. These payments are referred to "other reportable payments" and include:

• Rents
• Royalties
• Payments to research participants
• Reportable gross proceeds paid to attorneys
• Other income payments

Copy B – Recipient copy received by January 31st.

Copy 2 – Receipt copy that is used to submit with individual state income tax return when required.

Answer: A worker’s role determines which information return the university will provide. The university provides a Form 1099-MISC for certain types of miscellaneous payments and Form W-2 to employees.

However, there may be instances where a worker may be performing to receive some type of miscellaneous income and serving as an employee for the university.

Example: Joe is a custodian who works in facilities. The university views him as an employee and issues him a Form W-2 for these services. He is also an enrolled student and qualifies for awards, prizes and grant participation. These types of miscellaneous income payments are separate and distinct from his services and responsibilities as a custodian. Therefore the university will treat these types of payment transactions as miscellaneous income. The university reports this miscellaneous income on a Form 1099-MISC in Box 3, Other Income Payments.

Examples of payments reported on a 1099-MISC include:

• Rents
• Royalties
• Awards
• Prizes
• Honorariums
• Research Subjects
• Other Income
• Medical / Dental Services
• Legal Services

For any amounts greater than $600, a 1099 is required, EVEN IF THEY ARE INCORPORATED.

If the payment made by the university is for legal services provided by an attorney, and is an amount greater than $600, the university will report these amounts on a 1099-NEC.

However, Gross Proceeds (from a settlement) paid to an attorney, are reported in box 10 of a 1099-MISC.

• Box 1 (Rents) – Report rents from Real Estate. This box reports any rental payments received from Rowan University Accounts Payable.
• Box 2 (Royalties) – Report royalties on copyrights and patents. This box reports any royalty payments of $10 or more received from Rowan University Accounts Payable.
• Box 3 (Other income) – This box includes any payments received as the beneficiary of a deceased employee, prizes, awards, or other taxable income. For Accounts Payable issued 1099’s, this box will include any payments related to prizes, awards, and grant participation.
• Box 4 (Federal income tax withheld) – This box shows backup withholding where applicable. Generally, Rowan University must backup withhold federal income tax at a rate of 24% if a Tax Identification Number was not provided.
• Box 6 (Medical and health care payments) – This box reports any payments to a medical professional exceeding $600. This figure will report any medical or health payments received from Rowan University Accounts Payable.
• Box 10 (Gross proceeds paid to an attorney) – This box reports any payments of $600 or more paid to an attorney/law firm who performed services for someone else.

Although incorporated vendors do not require a 1099-MISC to be issued at year-end (i.e., C-Corps and S-Corps), the university requires that all vendors submit a W-9 and in some instances a 1099-MISC may be send if the W-9 is incomplete or ineligible.

The 1099-MISC form is a sort of “catch-all” form that the university uses to report all other payments that include (but are not limited to):

• Rent payments
• Royalties (at least $10)
• Prizes and awards
• Legal settlements
• Medical and health care payments
• Other income
• Grant participants
• Honorarium 

Yes. If payment of the service is for rent, a research participant, legal, medical, the amount reported is $600.00 or more. If the payment is a royalty payment, then the amount is $10.00 or more. The payments are accumulated within the calendar year in which the service is provided. However, if the payment is NOT received within the calendar year in which the service was provided, then it will be reported to the individual/entity and the IRS in the year in which the payment was actually received.

Yes. There is an exception in which an employee can receive payment for other than performing their normal functions as a University employee. An employee can receive payment for participating in a research study; he/she can be paid a percentage of the income from authoring a book, a piece of music or for an invention. This is called a royalty.

The university must be filed for any individual or entity(vendor) whose total payments meet or exceed the following thresholds.

• At least $10 in royalties
• At least $600 in rents, prizes and awards, or other income payments.

 Individuals or entities who do not meet the thresholds above will not receive a 1099-MISC tax form.

• Do verify the vendor provided a completed W-9 and that the tax ID is accurate
• Do remind individuals or vendors about the reportable threshold of $600 or greater per calendar year
• Do check vendor history in Banner FAIVNDH to ensure the vendor was paid more than $600 that calendar year
• Do provide the individual or vendor our dedicated inbox, invoices@rowan.edu, to contact AP if they have 1099 questions
• Don’t provide tax advice to individuals or vendors for 1099 forms
• Don’t use Form 1099-MISC to report nonemployee compensation
• Don’t request 1099-MISC forms on behalf of the individual or vendor

Contact Accounts Payable with questions about Form 1099-MISC. This includes questions related to amount, payment detail, incorrect Tax ID, name listed on the form or if the form was lost or never received.

Sabrina S. Boron
boron@rowan.edu
856-256-4140

Accounts Payable 
invoices@rowan.edu
865-256-4115