Non Employee Payments
If an individual or business performs services for the college, we must first determine if there is an employee relationship with that vendor, or if they should be considered an “independent contractor”. The IRS has specific guidelines which determine the correct classification. In an effort to simplify this determination for our employees, we have prepared an Employee/Independent Contractor Checklist to expedite this process.
Upon determining that the vendor is an independent contractor, the Business Office asks that all departments please submit the completed Employee/Independent Contractor Checklist form and IRS Form W-9 with the first requisition for payment. These will be kept on file in the business office as documentation for any potential audit inquiries. Subsequent payments to that same independent contractor may simply note the following information on the purchase requisition: "Information on File with Business Office”.
IRS Form W-9
If it has been determined that the vendor is an Independent Contractor, then an IRS Form W-9 must be completed and sent to the Business Office. It will be kept on file to assist in the reporting of payments to the IRS each year.
Should a vendor be subject to the IRS1099-MISC income reporting, federal law will require us to withhold up to 28% in federal withholding taxes from payments due until we receive a correct tax identification number. If the vendor is an individual, this number is the social security number.
Forms are available at www.irs.gov/pub/irs-pdf/fw9.pdf.
IRS Form 1099
As per IRS Regulations, Daemen College is obligated to report certain types of payments on a Form 1099-MISC for each calendar year. If it is determined that an individual or business is a non-employee (independent contractor), we must evaluate payments during the calendar year to determine if we must issue a 1099-MISC Form by January 31. If the following four conditions are met, we must issue the form:
- We made the payment to someone who is not our employee.
- We made the payment for services.
- We made the payment to an individual, partnership, estate, or in some cases, a corporation.
- We made payments to the payee of at least $600 during the calendar year.