Tax Implications for Affiliate Payments [US]

For merchants

Merchants are required to 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's tax details, to later fill the Form-1099-MISC. The W-9 form itself is not required to be submitted to the IRS.

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.

pageW9 Form for Affiliates

Once they have filled the form, a PDF gets generated and sent to you (as well as the affiliate). The generated PDF can also 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.

Summary

Requirements for W-9 and 1099-misc?

• Affiliate whose annual payments > $600

• Affiliate is a US taxpayer or US business entity

Who fills what?

• Form W-9 is to be filled by Affiliate

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

How to fill the forms?

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

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

For affiliates

Affiliates only need to fill 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.