Tax Implications for Affiliate Payments [US]

For merchants

Merchants must file Form-1099-MISC with the IRS for all the affiliates registered as US taxpayers whose total payments in a financial year are more than $600. FORM-1099 is a physical form that needs to be obtained from the IRS and has to be filled and signed by hand.

To fill and submit Form-1099-MISC, you need to collect Form W-9 from the affiliates. Form W-9 is just a taxpayer identification form and is only used for collecting the affiliate tax details to fill the Form-1099-MISC later. The W-9 form itself is not required to be submitted to the IRS.

W-9 Form

To collect Form W-9 from affiliates, you can enable the W9 Form functionality from the Settings > Extras section. Once enabled, your affiliates can fill this form from within their dashboard in the Settings tab.

W9 Form for Affiliates

Once they have filled out the form, a PDF gets generated and sent to you (and to the affiliates). The generated PDF can be downloaded from the Affiliate Files tab in the GoAffPro admin panel.

Merchants do not have to withhold tax/payments from the affiliates. They only have to ensure that for eligible affiliates, they collect the W-9 form for 1099-MISC form filing.

1099-NEC Form

To generate the 1099-NEC form for affiliates, go to the Settings > Extras > W9 Form section, and generate it from there. You can generate the form for eligible affiliates who received more than $600 in payouts during the previous year.

Generate 1099-NEC Form for Affiliates

The 1099-NEC form will be generated as a downloadable PDF for you and your affiliates.

Summary

Requirements for W-9 and 1099-misc?

• Affiliates whose annual payments > $600

• The affiliate is a US taxpayer or US business entity

Who fills what?

• Form W-9 is to be filled out by the affiliates

• Form 1099-Misc is to be filled by the merchants (one form per affiliate where aforementioned requirements are met)

How to fill out the forms?

• Form W-9 can be filled out online by the affiliates in their dashboard

• Form 1099-Misc needs to be bought and then filled by the merchant and then sent to the IRS (along with their business tax returns)

For affiliates

Affiliates only need to fill out Form W-9 in the Settings tab of their account dashboard. No separate action is required for their affiliate income.

Disclaimer: This is not intended to be a definitive guide. Please consult your accountant or legal team for more information on this subject.