Tax Reporting Requirements

The Federal Government requires that any miscellaneous income in the amount of $600 or more earned in one calendar year must be reported as income on the earner’s federal taxes. Therefore, if any workgroup member earns $600 or more in compensation (not including allowances) from one agency, that agency must issue a 1099-MISC form to the workgroup member. If any workgroup member receives compensation from more than one agency for participating in multiple workgroups, this $600 amount is applied per agency and is not calculated cumulatively. The IRS requires 1099 forms to be sent to compensation recipients by January 31st of each year for the previous year’s earnings. If compensation is distributed from the State of Washington, the respective state agency is responsible for issuing the 1099-MISC form. If the compensation is distributed via a third-party administrator, it is the responsibility of the third-party administrator to issue the 1099-MISC form. Agencies should include this requirement in contracts with third-party administrators (including nonprofit agencies, private businesses, and agents whose primary purpose is the distribution of payments) to ensure they are aware of their obligation. Retired state employees who receive stipends may need to consult with Retirement Services to ensure there are no potential impacts on retirement payments.