Paying affiliates means paying independent contractors, and paying contractors comes with paperwork. This guide covers the US forms a US-based company typically deals with. It is general information, not tax advice: the right treatment depends on your company and your partners, so confirm with an accountant before you rely on it.
The short version
- US partners give you a Form W-9 with their taxpayer identification number.
- Partners outside the US give you a Form W-8BEN (individuals) or W-8BEN-E (entities), certifying they are not US persons.
- You report what you paid each US partner on Form 1099-NEC when their annual total reaches the federal threshold — $600 for payments made in 2025, $2,000 for payments made after December 31, 2025, adjusted for inflation from 2027.
- Collect the form before the first payout, not at year end.
Form W-9: US partners
A W-9 gives you the partner’s legal name, tax classification and taxpayer identification number (a Social Security number or an employer identification number). You do not send it to the IRS; you keep it, and use it to file 1099s.
Ask for it when a US partner sets up their payouts. If a partner who should give you a W-9 does not provide a correct taxpayer identification number, you may be required to apply backup withholding — currently 24% — to their payments. Collecting the form up front avoids that conversation.
Store the number securely, and only as much of it as you need. Many systems keep the last four digits for display and never show the full number again.
Form W-8BEN and W-8BEN-E: partners abroad
A foreign individual certifies their status on a W-8BEN; a foreign company uses a W-8BEN-E. The form establishes that the partner is not a US person, which generally means you do not issue them a 1099.
Commissions paid to a foreign partner for services they perform entirely outside the United States are generally not US-source income, and so generally not subject to US withholding. The W-8 form is your documentation for treating them that way. Partners who perform services in the US, or who claim treaty benefits, are more complicated — involve an accountant.
How long the forms last
A W-9 does not expire, though you should ask for a new one if the partner’s details change.
A W-8BEN generally remains valid until the last day of the third calendar year after the year it was signed, unless a change in circumstances makes it incorrect. A form signed in March 2026 is good through December 31, 2029. Track expiry dates and ask partners for a new form before the old one lapses, so a payout is never held for it.
Form 1099-NEC: reporting what you paid
For each US partner you paid at least the threshold amount in a calendar year, you file a Form 1099-NEC with the IRS and send a copy to the partner, generally by January 31 of the following year.
The threshold changed. The One Big Beautiful Bill Act raised it from $600 to $2,000 for payments made after December 31, 2025, with inflation adjustments starting in 2027. So:
- For payments made in 2025 (filed in early 2026): the threshold is $600.
- For payments made in 2026: the threshold is $2,000.
The threshold is a reporting requirement, not a prohibition — you may still issue a form below it. And states set their own rules; some have not followed the federal change, so check the states where your partners live.
There is one more wrinkle. If you pay partners through a payment platform that itself reports the payments, the reporting obligation can shift. Confirm how your payout provider handles it.
No form, no payout
The simplest policy is also the safest: hold a partner’s payout until their tax form is on file and valid. Tell them clearly why their payout is waiting and what to do, and let them complete the form in the same place they see their earnings.
Year-end checklist
- Export the total paid to each US partner for the calendar year.
- Check every partner above the threshold has a valid W-9 on file.
- File Forms 1099-NEC and send partner copies by the deadline.
- Ask for new W-8BEN forms from partners whose forms expire this year.
- Keep the forms and the payment records for at least as long as your accountant advises.
Tax rules change, as the 2026 threshold shows. Review this list with your accountant once a year, before January.
Doing this in Affiligato
Partners add their tax form in the portal when they set up payouts: a W-9 for US partners, a W-8BEN or W-8BEN-E for everyone else. Of the tax number, only the last four digits are kept once the form is processed. A managed payout is held while a form is missing, the partner is emailed to add it, and the payout goes out with the next run once they do.
At year end, export every US partner’s total paid together with their W-9 details, ready for 1099-NEC filing. Check the threshold for the year you are filing against before you file: $600 for payments made in 2025, $2,000 for payments made in 2026.
