Your Church 1099 Filing Guide: 5 Best Practices for a Stress-Free Season

Churches and nonprofits are required to file 1099s each year for individuals and qualifying businesses paid above the federal threshold. That threshold has changed, and filing for 2026 payments happens in January 2027. Tax compliance may not be the most exciting part of ministry, but handling it well is a matter of good stewardship. Here is what you need to know to stay compliant and keep your sanity intact.

The new $2,000 threshold. For payments made in 2026, the reporting threshold for Forms 1099-NEC and 1099-MISC rises from $600 to $2,000 per payee for the year. You will see it for the first time when you file in January 2027. Starting in 2027, the amount adjusts for inflation each year. A few payment types follow different rules, so keep tracking every vendor payment and collecting W-9s no matter the amount.

5 Best Practices Starting Now

1. Collect W-9s immediately. Never wait until January.

Make it a firm policy to collect a W-9 from every new vendor as soon as they are engaged. Chasing W-9s in January after the invoices are paid is the most common source of 1099 headaches. With ChurchBiz's client portal, W-9 requests can be sent directly to vendors the same month they are first paid.

2. Separate honorariums from expense reimbursements in your chart of accounts

Create distinct lines for Guest Speaker Honorariums (taxable, reportable on 1099) and Travel Reimbursements (non-taxable, not reportable). This single habit simplifies 1099 reporting and keeps your budget tracking clean year-round.

3. Use the check memo line every time

Marking a payment as "Reimbursement" vs. "Contract Services" on the memo line tells your accountant exactly what is taxable and what is not. This small habit saves hours of reconciliation work every January.

4. Keep all staff payments on W-2s, not 1099s

Any bonus or extra payment to an employee must run through payroll. Never write bonus checks directly to staff members. If this happens in late December, there may not be time to get it into payroll, and the employee's W-2 will not reflect all their income. Staff should never receive a 1099 from their own church.

5. Use automation to track W-9 collection

The ChurchBiz client portal can request W-9s directly and securely from new vendors. You provide the contact email and ChurchBiz handles the follow-up. No more paper trails or awkward reminders. The administrative burden is handled for you.

Common mistake to avoid. Do not use your church as a conduit to pay individuals directly under the guise of ministry expenses. Any payment that benefits a specific person rather than the organization's exempt purpose creates both tax and legal exposure. When in doubt, ask your ChurchBiz CSR before writing the check.