# Tax Implications for Affiliate Payments \[US]

### For merchants

Merchants must file [Form-1099-MISC](https://www.irs.gov/forms-pubs/about-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 ](https://www.irs.gov/forms-pubs/about-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.

{% content-ref url="../../program-settings/extra-settings/w9-form-for-affiliates" %}
[w9-form-for-affiliates](https://docs.goaffpro.com/program-settings/extra-settings/w9-form-for-affiliates)
{% endcontent-ref %}

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.

{% hint style="info" %}
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.
{% endhint %}

#### 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.

{% content-ref url="../../program-settings/extra-settings/w9-form-for-affiliates/generate-1099-nec-form-for-affiliates" %}
[generate-1099-nec-form-for-affiliates](https://docs.goaffpro.com/program-settings/extra-settings/w9-form-for-affiliates/generate-1099-nec-form-for-affiliates)
{% endcontent-ref %}

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.

{% hint style="warning" %}
**Disclaimer: This is not intended to be a definitive guide. Please consult your accountant or legal team for more information on this subject.**
{% endhint %}