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.

Payment amounts of $600 or more for services performed by someone who is not a Rowan employee. Nonemployee compensation may include professional services, fees, commissions, and prizes & awards for services performed by a nonemployee. The university must also report all other forms of compensation for services performed by a vendor. Some examples of types of jobs that might receive this form are:

• Caterer
• Dancer
• Event planner
• Food truck
• Graphic and web designers
• Home daycare provider
• Lawn and landscaping
• Musician, singer
• Personal chef
• Photographers
• Substitute Teacher
• Transcriptionist
• Travel agent
• Tutor
• Underwriter
• Writers

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-NEC for nonemployee compensation and Form W-2 to employees.

However, there may be instances where a worker may be serving as an independent contractor and 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 owns and operates a business that provides consulting services for motivational speaking on nights and weekends. Any consulting services he performs for the university are separate and distinct from his services as a custodian. Therefore the university will treat him as an independent contractor for his consulting business. The university reports this income on a Form 1099-NEC in Box 1, Nonemployee Compensation.

Box 1 - Nonemployee compensation: Payment amounts of $600 or more for services performed by someone who is not a Rowan employee. Nonemployee compensation may include professional services, fees, commissions, and prizes & awards for services performed by a nonemployee. The university must also report all other forms of compensation for services performed by a vendor.

The following are some examples of payments that are reportable:

• Professional service fees, such as fees to attorneys (including corporations), accountants, architects, contractors, engineers, etc.
• Payment for services, including payment for parts or materials used to perform the services if supplying the parts or materials was incidental to providing the service. For example, report the total insurance company payments to an auto repair shop under a repair contract showing an amount for labor and another amount for parts, if furnishing parts was incidental to repairing the auto.
• A fee paid to a nonemployee, including an independent contractor, or travel reimbursement for which the nonemployee did not account to the payer, if the fee and reimbursement total at least $600. 
• Payments to nonemployee entertainers for services. 

The following are some examples of services performed at the university:

• Attorney/law firm providing legal services to Rowan University
• Auto repair
• Consultants
• Independent contractors
• Landscaping
• Office cleaning
• Training
• Transportation
• Printers
• Publishers
• Security services
• Translators & interpreters

It’s a payment made by the university of $600 or more for services rendered by a vendor with some exceptions.

A service is an intangible commodity performed by a nonemployee that does not produce a tangible good, e.g., consulting, legal, medical, speaking fees, rent, etc.

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.

An individual/business entity not paid a salary or that does not accrue monetary benefits for performing daily tasks.

• 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-NEC to report rent, royalty, other income, employee wages or personal reimbursement
• Don’t request 1099-NEC forms on behalf of the individual or vendor

Contact Accounts Payable with questions about Form 1099-NEC. 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

Please direct these questions to your tax professional or to the IRS. Please visit www.irs.gov  for additional information.