Civil Air Patrol
2009 National Conference
Learning Lab FM02
Stacy Jackson

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Wing Responsibilities for 1099-MISC Reporting
1099-MISC
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Prizes and Awards
Rent and Royalty Payments
Services
Attorney Payments
Scenarios for Volunteers
Raffles
Wrap Up
Questions

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Be diligent with Accounts Payable postings. The first step is having correct information.
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Have only one vendor card for each vendor.
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Your WFA can merge vendor cards if more than one card exists for a vendor.
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Verify that transactions posted are accurate.
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Indicate 1099 Eligible Vendors in QuickBooks
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Done by editing the vendor and checking the 1099 option under the “Additional Info” tab.
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Add the vendor Taxpayer ID information to QuickBooks

Check this box if vendor is eligible for
1099 reporting
Enter vendor Tax
ID from W9 here

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Decide which vendors should receive a 1099-
MISC
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Obtain Form W-9 from vendors
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The Form W-9 is used as a tool to obtain the necessary information from vendors. It will help determine if payments to vendors are reportable.
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A Form W-9 should be obtained from all vendors and kept on file at wing headquarters.

Vendor should choose one business type.
Vendor must sign!
Vendor should enter one TIN number. This number should match their annual tax returns.

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Determine the amount to be reported on each
1099-MISC
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Provide all information needed to file your
1099-MISC Forms to your WFA. A spreadsheet will be provided that will aid in consolidating the information.
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All information must be provided no later than Jan
15 th for the preceding calendar year.
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NHQ will file all 1099-MISC Forms with the IRS, state tax authority, and recipients

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Prizes and Awards
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Rent and Royalty Payments
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Services performed by individuals who are not employees and are not incorporated
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Gross Proceeds paid to Attorneys

All of the information for the recipient must match their annual income tax return

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Reportable amount:
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$600 per calendar year
Information needed:
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Individual’s name and address
Individual’s Social Security Number
Total amount of all prizes and awards paid to the individual or on the individual’s behalf during the year
Example:
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Flight scholarships or any cash awards to members
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Scholarships are considered awards unless paid to a candidate to attend an educational institution for a degree

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Payments made to corporations and governments are not required to be reported
Reportable amount:
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$600 per calendar year for Rent
$10 per calendar year for Royalties
Information needed:
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Name and address that the vendor uses to file their annual tax return
Taxpayer Identification Number that the vendor uses to file their annual tax return
Total amount of all rent or royalty payments paid to the vendor during the year.
Example:
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Hangar rental, office rental, or storage rental

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Payments made to corporations are not required to be reported.
Reportable amount:
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$600 per calendar year
Information needed:
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Name and address that the vendor uses to file their annual tax return
Taxpayer Identification Number that the vendor uses to file their annual tax return
Total amount of all payments made for services to the vendor during the year.
Example:
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Catering, facility cleaning, lawn care, or pest control

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Payments made to corporations must still be reported.
Reportable amount:
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Reportable for any amount paid per calendar year
Information needed:
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Name and address that the vendor uses to file their annual tax return
Taxpayer Identification Number that the vendor uses to file their annual tax return
Total amount of all payments made to the vendor during the year
Example:
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Retainers and legal fees paid to law firms

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There are several instances when a 1099-MISC is required to be sent to volunteers.
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A volunteer receives a flight scholarship or activity scholarship from a CAP entity.
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A volunteer receives a cash award from a CAP entity.
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A volunteer rents out hangar, office, or storage space to a CAP entity.
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A volunteer provides cleaning or lawn care services to a CAP entity and receives compensation.

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All raffles must be reported to NHQ/FM prior to the raffle taking place.
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All required information must be obtained by the Wing or Unit.
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IRS Form 5754 must be completed by each winner.
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All prizes with a fair market value of $600 or more must be reported to the IRS.
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IRS Form W-2G

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All prizes with a fair market value of $5000 or more are taxable.
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Winner will pay 25% withholding tax on the fair market value less the initial wager. This must be collected from the winner when they collect the prize.
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Wing or Unit sponsor will pay 33.33% withholding tax on the fair market value less the initial wager.
NHQ/FM will complete all IRS Forms and filing requirements.
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Taxes will be drafted from the Wing or Unit bank account and submitted to the IRS

All information must be completed by
Part II = only taxable winners

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All forms must be filed with the same information as the individual or business uses to file their income taxes each year
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Sole Proprietorships should be sent in the individual’s name, not the business name
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Forms sent to individuals should contain their social security number, not an employer identification number.
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All information should be reported by calendar year, not fiscal year

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The Wing is responsible for obtaining all information via Form W-9 or Form 5754.
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The IRS penalizes $50 per form for incorrect information filed on 1099 Forms or W-2G Forms that are not supported by the required back up.

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Contact your Wing Financial Analyst
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Contact National Headquarters
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Stacy Jackson, WFA
 sajackson@capnhq.gov
877-227-9142, Ext. 427
Cell – 334-224-7657