Disclaimer: US-based Merchants: We’re going to give you some light, unofficial guidelines here. But you should always consult a tax attorney for the official word! And if you are based outside the US, you should consult your country’s tax authority.
More often than not, Affiliates, influencers, and ambassadors are considered 1099 (independent) contractors by the IRS.
Onboarding: You’ll first need to establish your Affiliates’ tax status. You’ll do this by collecting a W9 form from US-based Affiliates, and a Form W8-BEN / Form W8-BEN-E from Affiliates based outside the US. (The penalty for forms not filed is $270 each.)
Note: Refersion does not store or send any of this information. You will need to take this process outside of Refersion, or consider an integration with Payment Rails (see below).
End-of-Year: It’s up to you, the Merchant, to furnish a 1099-NEC for US-based Affiliates who earned $600 or more (or had any withholding) within the tax year. You’ll need to furnish a 1042-S to Affiliates based outside the US who earned any income (or had any withholding) from your program within the tax year.
You’ll need 3 copies of your forms: one for your records, one for each Affiliate, and one for the IRS.
Refersion does not furnish forms or store affiliate tax information on its own, but we do integrate with Trolley to make tax handling easier for you. Read all about the Payment Rails-Trolley integration.