# Paying Coaches, Instructors, and Contractors as a Booster Club

> How a booster club pays coaches and contractors: Form W-9, the $2,000 Form 1099-NEC threshold for 2026, employee vs contractor status, and paying school staff.

- URL: https://boosterclub.org/taxes/paying-people/
- Section: Taxes
- Updated: 2026-10-06

A booster club that pays anyone for services, whether a clinician, a private coach, a choreographer, a DJ, or a concession worker, takes on federal reporting duties: a Form W-9 before paying, a Form 1099-NEC after year end for larger payments, and payroll taxes if the person is legally an employee. For payments made in 2026, the Form 1099-NEC threshold rose from $600 to $2,000.

The treasurer collects the paperwork and files the forms. The board approves who is paid and how, and it must first confirm that the school district allows the payment at all.

## First Question: May the Club Pay This Person?

Many districts restrict booster clubs from paying district employees directly. A common arrangement is that the club gives money to the district and the district pays a stipend through its own payroll. Whether the club may pay a coach, a teacher, or an outside instructor directly varies by district and is usually spelled out in board policy or the club's memorandum of understanding (MOU) with the school. See [School District Fundraising Policies and MOUs](https://boosterclub.org/fundraising/district-policies/).

Two other checks come before any payment:

- **Conflicts of interest.** Paying an officer, or an officer's spouse or business, requires disclosure, an arm's-length price, and a vote by disinterested board members. See [Conflict of Interest Policy](https://boosterclub.org/governance/conflict-of-interest/).
- **Equity.** Booster-funded coaching for one team can affect the district's Title IX obligations. See [Title IX and Booster Club Fundraising](https://boosterclub.org/fundraising/title-ix/).

## Employee or Independent Contractor

The Internal Revenue Service (IRS) decides worker status under common law rules that look at the degree of control and independence in three categories:

| Category | The question | Points toward employee |
|---|---|---|
| Behavioral | Does the club control or have the right to control what the worker does and how? | The club sets the schedule, methods, and supervision |
| Financial | Does the club control the business side of the work? | Hourly pay, club-provided equipment, expenses reimbursed, no chance of profit or loss |
| Relationship | How do the parties see the arrangement? | Ongoing work, benefits, work that is a key part of the club's activity |

No single factor decides. Typical booster club outcomes:

| Worker | Likely status |
|---|---|
| Percussion clinician for a two-day camp, runs a teaching business, sets own methods, invoices the club | Independent contractor |
| DJ or photographer hired for one event through their own business | Independent contractor |
| Assistant coach paid weekly, on a schedule the club sets, directed by club officers | Possibly an employee |
| Adults paid hourly to staff the concession stand under club supervision | Likely employees |

When status is unclear, the club or the worker may file Form SS-8 to ask the IRS for a determination; the IRS says it may take at least six months. A club that treats an employee as a contractor can be held liable for the employment taxes it should have withheld and paid.

## If the Club Has Employees

A public charity that pays wages must withhold federal income tax, pay Social Security and Medicare (FICA) taxes for each employee paid $100 or more in wages in a calendar year, and report on Form 941 quarterly (or Form 944 annually if the IRS instructs). Each employee completes Form W-4. Public charities do not pay federal unemployment (FUTA) tax, according to IRS Publication 4221-PC. State unemployment insurance and state withholding vary by state.

Payroll is demanding work for a volunteer treasurer, because deposits are frequent and penalties add up. A club with any employees should use a payroll service or a qualified bookkeeper.

## Paying Contractors: Form W-9 and Form 1099-NEC

1. **Collect Form W-9 before the first payment.** The form gives the payee's legal name, taxpayer identification number (TIN), and entity type. Keep it on file; do not send it to the IRS.
2. **Withhold if there is no TIN.** If a payee fails to provide a correct TIN, the club may be required to backup withhold 24% from reportable payments, deposit it, and report it on Form 945.
3. **Track payments by calendar year.** Form 1099 reporting runs January to December, even when the club's fiscal year (its 12-month accounting period) does not.
4. **Apply the threshold for the year paid.**

| Payments made in | File Form 1099-NEC for a payee paid at least |
|---|---|
| 2025 | $600 |
| 2026 | $2,000 |
| 2027 and later | $2,000, which the IRS may adjust for inflation |

5. **Know who is exempt.** Payments to corporations are generally not reported on Form 1099-NEC, but payments to attorneys are reported even if the firm is a corporation. Sole proprietors, partnerships, and most limited liability companies (LLCs) taxed as partnerships or sole proprietorships receive a 1099-NEC. The W-9 tells the treasurer which applies.
6. **Exclude card and app payments.** Payments made by credit card, debit card, or through third-party payment networks are reported on Form 1099-K by the payment company, not on Form 1099-NEC by the club.
7. **File by January 31.** Copies go to the payee and the IRS by January 31. For 2026 payments, January 31, 2027 is a Sunday, so the deadline is Monday, February 1, 2027.
8. **E-file if required.** A club filing 10 or more information returns in total (counting all types together) must file electronically. The IRS offers an online portal for this, the Information Returns Intake System (IRIS).

Penalties for failing to file a correct Form 1099 are up to $340 per return for returns due in 2027, with lower amounts when corrected within 30 days, under Revenue Procedure 2025-32.

## Reimbursements Are Not Pay

Repaying a volunteer for a documented club expense under the club's written reimbursement policy is not a payment for services. A flat stipend, a gift card, or a fee waiver given in exchange for volunteering is. A 2011 IRS memorandum on booster clubs warned that fundraising credits applied to a participant's account could be income from services and could result in employment taxes. See [Booster Club Reimbursements and Expense Policy](https://boosterclub.org/finance/reimbursements/) and [Private Benefit and Individual Fundraising Accounts](https://boosterclub.org/taxes/private-benefit/).

## Raffle Prizes and Other Withholding

Prizes are not payments for services, but large raffle prizes carry their own federal rules. Regular gambling withholding of 24% applies when lottery or raffle winnings, minus the ticket price, are more than $5,000, and the club reports the withholding on Form 945. Form 945 is filed after the calendar year ends; for 2025 the IRS set the deadline as February 2, 2026. Details, including when Form W-2G is required, are on [Federal Tax Rules for Raffles](https://boosterclub.org/raffles/federal-rules/).

Scholarships are not reported on Form 1099-NEC. Scholarship programs raise their own private benefit questions about selection.

## Common Mistakes

- **Paying a district coach directly.** The district prohibits it, and the club creates an employment relationship it never intended.
- **Skipping the W-9.** At January 31 the treasurer cannot reach the contractor, and the club faces backup withholding duties and filing penalties.
- **Using the fiscal year for 1099s.** A June 30 club totals July to June and misses payees who crossed the threshold in the calendar year.
- **Calling everyone a contractor.** Hourly concession workers supervised by the club are likely employees, and the club owes the payroll taxes it never withheld.
- **Applying the old $600 threshold to 2026.** The club files unnecessary forms, or applies $2,000 to 2025 payments and misses required ones.

## Checklist

- [ ] Confirm the district allows the club to pay the person directly (president)
- [ ] Disclose and vote on any payment to an officer or an officer's family or business (board)
- [ ] Decide employee or contractor status using the IRS three-category test and record the reasoning (board)
- [ ] Sign a short written agreement stating the work, the fee, and the dates (president)
- [ ] Collect Form W-9 before the first payment (treasurer)
- [ ] Set up payroll through a service if anyone is an employee (treasurer)
- [ ] Track payments to each payee by calendar year (treasurer)
- [ ] File Form 1099-NEC for each payee at or above the threshold for the year paid (by January 31, or the next business day) (treasurer)
- [ ] File Form 945 for any backup or gambling withholding (treasurer)
- [ ] Keep W-9s, agreements, invoices, and filed forms with the year's records (secretary)

## Related Pages

- [Booster Club Treasurer Duties](https://boosterclub.org/finance/treasurer/) for where payroll and 1099s fit the treasurer's year
- [Working With the School and District](https://boosterclub.org/governance/working-with-the-school/) for who may be paid and how
- [Conflict of Interest Policy for Booster Clubs](https://boosterclub.org/governance/conflict-of-interest/) for payments to insiders
- [Federal Tax Rules for Raffles](https://boosterclub.org/raffles/federal-rules/) for prize reporting and withholding
- [Booster Club Compliance Calendar](https://boosterclub.org/taxes/compliance-calendar/) for January deadlines

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*This page is general information for volunteer-run booster clubs. It is not legal,
tax, or accounting advice, and BoosterClub.org is not a law firm, accounting firm, or
government agency. Rules change and vary by state and district. Confirm current
requirements with the IRS, the relevant state agency, the school district, and a
qualified professional before acting. If a fact on this page is out of date, we want
to know.*

## Sources

1. IRS: https://www.irs.gov/instructions/i1099mec
2. IRS: https://www.irs.gov/forms-pubs/about-form-w-9
3. IRS: https://www.irs.gov/businesses/small-businesses-self-employed/backup-withholding
4. IRS: https://www.irs.gov/businesses/small-businesses-self-employed/independent-contractor-self-employed-or-employee
5. IRS: https://www.irs.gov/pub/irs-pdf/p4221pc.pdf
6. IRS: https://www.irs.gov/instructions/i945
7. IRS: https://www.irs.gov/instructions/iw2g
8. IRS: https://www.irs.gov/pub/irs-drop/rp-25-32.pdf
9. IRS: https://www.irs.gov/pub/irs-tege/booster_club_field_directive_6-27.pdf