Reporting IC Tax Payments

Your 501(c)(3) may need to meet IRS and state information reporting requirements on payments it has made to an IC. These payments include all:

• Fees,
• Salaries,
• Commissions,
• Wages,
• Prizes,
• Awards, and
• Other forms of compensation.

Generally, if the IC is not a corporation (i.e., the IC is a sole proprietor or partnership) and your 501(c)(3) has paid the IC $600 or more during a calendar year in the course of the 501(c)(3)’s trade or business, then the organization has a reporting requirement for that IC.

Note: The IRS requires that 501(c)(3)s report payments made to health care providers and attorneys, regardless of incorporation.

There is a reporting requirement if the IC:

• Is not a corporation
• Was paid $600 or more
• Was paid in the course of the 501(c)(3)’s business