Procurement Services 110: IRS Reporting Requirements

Purpose

To provide departments with a method of expediting payments for independent contractors and honorarium recipients

Reference

University of Alaska Procurement Manual (not available online) Board of Regents Regulation R05.02.03, Section B, Compliance Reporting

Definitions

Honorarium: A gift or payment to an individual given as a token of appreciation for a service that has been provided free of charge.
Independent Contractor: An individual or organization contracted to perform a particular service and/or produce an agreed-upon outcome, where there is no right to specifically control and direct the manner in which the job is done. 

Policy

General Requirements IRS Form W-9 (Request for Taxpayer Identification Number and Certification) is required for the following payments:

• Vendors
• Independent Contractors
• Honorarium Recipients
• Prize and Award Recipients (cash or non-cash if the value exceeds $25.  Examples include juried art awards, raffle proceeds and other such winnings).

This form is needed to accurately obtain a social security or employer identification number and other reporting information for the individual, company or organization receiving a payment. The responses on the W-9 as well as the type of service provided will determine whether the university is required to report the income to the IRS on Form 1099 at the end of the calendar year.

Expediting Payment For new service providers or honorarium recipients, UAA departments may expedite payments by obtaining and submitting a W-9 form along with the other backup information after completing a Banner requisition. If no form is provided with the backup information, Procurement Services or Accounts Payable will verify the in-file existence of a W-9 Form. If no W-9 is found, a form will be sent and completion required before the purchase order will be issued or payment made.
Click here to obtain a cover letter that should accompany IRS Form W-9 for Honorarium recipients.   Click here to obtain IRS Form W-9 with related instructions.

Effective: 10/25/2005