Rach98n, I saw that you're still active on this board... I'm wondering how this worked out for your PTO.
We currently have a similar program. I -- the new worrywort treasurer -- and the previous treasurer who I consulted are concerned about sending a 1099 because it's never been done before and we're both concerned that the person providing the program might no longer be interested in doing it if all of a sudden this person had to start paying taxes quarterly, filing a Schedule C, etc.
Our PTO uses the school district's EIN, so I'd quite possibly just have to give the district the information. While I'm not an accountant or lawyer, I have been both an employee and an independent contractor (often simultaneously for different client/employers) at various times throughout my work history, so I'm quite sure this person would be an independent contractor and no special expertise is needed to see that the totals of checks is >$600/y.
I haven't talked with the provider about it yet... would be nice to hear from someone else what a similar provider's response was.
Thank you - I think you explained it VERY well. YES, they come up with the idea for the course, the amount they want to charge, and the curriculum. We just administer the program (sign ups, etc). I think a 1099 is the way we go. I appreciate your input!!!
It depends, but it sounds like there's a good possibility that you should be providing these people with 1099s, if they get paid more than $600 in a calendar year.
Generally speaking, if these individuals develop a curriculum and teach these classes with very little guidance from the PTO, they are independent contractors and should get a 1099. For example, we have a person that comes in and teaches a theatre arts program. She is an individual (doesn't have her own company), but offers the same menu of theatre arts courses to various elementary schools in our area. We don't get much say in terms of what or how she teaches, although we can suggest a theme for the course's final performance. She's an independent contractor, and we give her a 1099 at the end of the year.
If the PTO developed the curriculum and provides all the materials, and you have an individual coming in to teach "your" course, then they could be considered employees. Then, they would get a W-2, not a 1099, and you would be subject to various payroll taxes.
If the instructor works for a company, you might not have to provide a 1099 or a W-2. Let's say you have a parent who runs a tae kwon do school. If he comes in to do an afterschool tae kwon do program, you should probably be paying his school, not him. Then if his school is incorporated, you wouldn't need to provide a 1099.
Given the number of different programs you offer, you might be best off consulting a local tax professional to help you sort it out. Giving out a 1099 is really quite simple; but you want to make sure that they are truly independent contractors and not employees. If these people should be classified as employees, that makes things very complicated.
We have a very successful after school program which allows children to sign up for classes that last one hour after school. Some examples are karate, guitar, art, etc... The PTO collects the fee from the student and pays the instructors (we get no profit). Many of the instructors are parents or teachers. We have never before filed any 1099 for paying these people....any thoughts? Some of them make over $1000. Help please!
