Paying Student Organizations
Compensation for services is reportable either on a W-2 for employees or on a 1099-NEC for independent contractors. This means the payee MUST have a taxpayer identification number (TIN), whether the payee is an individual, a business or an organization. In the case of a business or an organization, the TIN would be an employer ID number (EIN).
Since student organizations/groups (including Registered Student Organizations) are completely separate entities from CMU, they are NOT covered under the university's tax-exempt status or taxpayer identification number (EIN). Therefore, student organizations must apply to the IRS for their own EIN, if they want to work on campus. Please note that, unless the student organization also files paperwork with the IRS to be recognized as a tax-exempt organization, a 1099-NEC would be issued to them if paid $600 or more (for services provided) during the tax year.
If a student organization does NOT have an EIN, we cannot process a payment to them for services performed by individual members of the organization – even if payment is in recognition of “volunteered” services. The individual members who worked (or volunteered their services) would need to be hired and paid as student employees.
A student organization should also have an EIN to receive payment for a prize or award, as the payment could be reportable on a 1099-MISC. However, an EIN is not required to process a payment to reimburse expenses to a student organization as long as original receipts are provided with the request.
Read more about tax information for student organizations (PDF). If you have questions, please contact Payable Accounting.