Stakes in the United States are required to file Form 1099-MISC by January 31 if any payees have received over $600 during the previous year for rent or services such as performers, entertainers, or caterers, with several exceptions. This form falls under the duties of the financial clerk.
Where applicable, stakes and districts are responsible to file Federal Tax Form 1099-MISC before January 31. The purpose of Form 1099-MISC is to report to the Internal Revenue Service (IRS) and the vendor certain payments totaling $600 or more that a stake, district, ward, or branch made to any payee during the year. These include either single payments or cumulative payments for rent or for services performed by people who are not Church employees. However, payments made from fast-offering funds are not reported on Form 1099-MISC. The payment types are defined in the IRS Form 1099-MISC instructions.
If stakes and districts do not submit copies of Form 1099-MISC, the IRS may impose a penalty of $50 per omission on either the Church, the payee, or both, depending on the situation.
Reporting is not required for payments to:
- Those who receive Church welfare.
- Church members for reimbursements.
- Third parties (such as doctors or landlords) who receive payments on behalf of welfare recipients.
- Utility companies.
- Other Church units.
- LDS Family Services.
- Real estate agents.
- Vendors providing materials, food, or supplies (except when combined with reportable rent or services).
Ward or branch responsibilities
By the end of the year, give the stake or district clerk the following information about all those (except Church employees and those listed above) who received payments for rent or services:
- Name (as listed with the Social Security or employer identification number)
- Social Security number or employer identification number
- Total amount paid during the year
- Obtain copies of Form 1099-MISC and the transmittal form that goes with it (Form 1096). These forms may be ordered from the IRS and are usually available each year by November.
- Make sure you have all the information you need from wards and branches. Prepare a Form 1099-MISC for each payee who received $600 or more during the year, either as a single payment or as cumulative payments from one or more units. If more than one unit paid the same vendor or individual, combine the payments onto a single form. You should also prepare forms for payees paid by the stake or district.
- The form requires that you enter the "PAYER'S federal identification number" which is the Employer Identification Number (EIN) for the stake. If you do not have that number, contact the Tax Department at the administrative office.
- Mail the forms to the payees by January 31.
- Mail copies of the forms with Form 1096 to the IRS by February 28.
- If a payee refuses to give his or her Social Security number or employer identification number, the unit making the payment is required to withhold 28% of the amount so it can be sent to the IRS. Any withholding for Form 1099-MISC purposes is remitted along with the Form 945.
- Determine if your state also requires information to be sent on Form 1099-MISC.
- IRS Form 1099-MISC (for informational purposes only)