When will you use a W-9 as a 4-H group?
A few tips for 4-H groups on when and how to use a W-9.
Does your 4-H group give out scholarships or do a fundraiser that includes prizes or awards. Does your 4-H group pay vendors or individuals? If the answer is yes to either of these questions, be aware that the vendors, individuals and prizewinners may be responsible for paying taxes on that award or prize if the single payment, prize, award or money is valued at $600 or more. If this is the case, the 4-H group must have the vendor, prizewinner or scholarship recipient complete a Federal Income Tax (W-9) Form.
Some examples of prizes or awards includes:
- Door prize of $600 or more at a fundraising dinner (such as a saddle, trip or other prize).
- $600 or more sponsorship given directly to a youth to attend a 4-H or non-4-H event.
- $600 or more college scholarship given directly to a person (and not given to the financial institution).
- Single payment of $600 or more to a vendor (such as a judge, photographer, event help, etc.).
In addition, 4-H groups will need to need to provide a sheet with following information to their 4-H program coordinator:
- Amount/value of the single payment or award.
- Purpose of the single payment or award.
- Payer (group providing payment or award).
Why is this additional information needed?
If the value of a prize (including monetary and nonmonetary items) awarded to a participant during a calendar year is $600 or more, Michigan State University needs to provide the individual with IRS Form 1099-MISC. To track this information, MSU needs to have additional information beyond what is on the W-9.
Therefore, before any vendor, prize or scholarship winner receives their payment, prize or scholarship, the 4-H group needs to have the person complete, sign and date (and give to the group’s leader) an IRS Form W-9. Within 10 business days after the fundraiser or payment, the 4-H group leader needs to provide W-9 and the County 4-H Fundraising Report Form to the county 4-H program coordinator.
Due to the personal nature of the information on the W-9 form, it must be mailed—not emailed or faxed. If there are concerns about using the mail, discuss options with United States Postal Service personnel.
If the winner refuses to complete a Form W-9, they cannot claim the payment, prize or scholarship. Instead, the group leader should retain the payment, prize or award and contact the 4-H program Coordinator for further help.
For more information on 4-H financial policies, including the W-9 process, please review the “Financial Manual for 4-H Volunteers: Leading the Way to Financial Accountability” and the “Financial Manual for 4-H Treasurer: A Guide to Managing Money Wisely”
Michigan State University Extension and Michigan 4-H Youth Development help to prepare young people for successful futures. As a result of career exploration and workforce preparation activities, thousands of Michigan youth are better equipped to make important decisions about their professional future, ready to contribute to the workforce and able to take fiscal responsibility in their personal lives.
To learn about the positive impact of Michigan 4-H youth career preparation, money management and entrepreneurship programs, read the 2016 Impact Report: “Preparing Michigan Youth for Future Employment.”