Paying affiliates, creators and contractors
- This page covers US federal rules for business payments to people who aren't your employees
- Get a Form W-9 from each US payee before the first payment, through a secure upload
- For payments made in 2026, file a 1099-NEC if you pay a US non-employee $2,000 or more in the year for services. Commissions count, and there are exceptions. IRS
- Paid by card, or through a network that settles the money to the payee? Those payments don't go on your 1099-NEC. A bank-to-bank transfer counts as a bank transfer. IRS
- Search each payee in OFAC's free Sanctions List Search before the first payment
- Write commission timing into your terms, and confirm bank details, first and changed, before paying
You pay people who aren't on your payroll. Affiliates earn commission on sales. Creators get paid per post or per view. Contractors bill for a job. Before money moves, each payee needs a tax form, a sanctions search and a bank account you've confirmed.
Whether someone's an employee or a contractor is a separate question with its own IRS tests. Start with IRS Publication 15-A. Employees go through payroll, not this page. It's about what to collect and ask. Check how the rules apply to you with your accountant.
Before the first payment
Ask each US payee for a completed Form W-9. It gives you their legal name and taxpayer identification number, or TIN. Collect it through a secure upload. Keep full tax IDs out of email and chat. Pay once it's on file.
Collect bank details the same secure way. Confirm the first account with the payee through a channel you already trust, before the first payment. Do the same for any later change: see bank details changed.
Won't give you a TIN? Hold the payment and ask again. Without a TIN, you may have to withhold 24% of reportable payments and send it to the IRS. That's backup withholding. The IRS requester instructions explain when it applies. IRS W-9 requester instructions.
Paying someone who isn't a US person? They don't use a W-9. A foreign individual usually gives you Form W-8BEN. A foreign business generally uses W-8BEN-E, and some need another form. Work done inside the US can need a different form too. IRS W-8BEN instructions.
A W-8 form alone doesn't settle US withholding or reporting. US-source payments to foreign persons can need withholding and a Form 1042-S. Check both with your accountant before the first payment. IRS withholding agent FAQs.
Send new payees this:
Before your first payment, please upload a completed Form W-9 here: [secure link]. If you're not a US person, tell us first. We'll confirm the right form, and any withholding or reporting, before we pay.
Want a light identity check on new partners too? See when you need KYB.
Which form, and who files it?
For payments made in 2026 to US payees. Paying someone outside the US? Ask your accountant about reporting first.
| How you paid | Who reports it | Form |
|---|---|---|
| Check, ACH, wire or other bank transfer, for services: $2,000 or more to one payee in the year | You | 1099-NEC |
| Credit or payment card, or a third-party network that settles the payment | The card or network's settlement entity, if the payment meets its own reporting rules | Not your 1099-NEC. Any form comes from the network, on a 1099-K |
| A prize that isn't for services, such as a giveaway: $2,000 or more in the year | You | 1099-MISC |
The $2,000 floor applies to tax years beginning after 2025, and the IRS may adjust it for inflation from 2027. Payments made in 2025 used a $600 floor. IRS 2025 instructions. Commissions, fees, prizes and awards for services all count as nonemployee compensation. Payments to corporations are generally exempt, with exceptions the instructions list. Took backup withholding? File the matching 1099 even below its usual floor: 1099-NEC for services, 1099-MISC for a prize that isn't for services. IRS 1099-MISC and 1099-NEC instructions.
File the 1099-NEC with the IRS, and send the payee their copy, by January 31 of the next year. When that's a weekend or holiday, the deadline moves to the next business day. IRS 1099-MISC and 1099-NEC instructions, IRS general instructions.
A network files a 1099-K only when its own reporting rules are met, so a payee paid that way may get no form at all. The 1099-K guide covers those rules from the receiving side.
Your state can have its own filing rules. Check them with your accountant. Paying through a platform? Ask it whose name the 1099 goes out in. See if a platform pays them for you.
Search sanctions lists before you pay
OFAC's sanctions bind every US person, including US citizens abroad, everyone in the US and every US-incorporated business. OFAC FAQ 11. A sanctioned person can live anywhere, not just in a sanctioned country. OFAC basic FAQs.
Before the first payment, search the payee's name in OFAC's free Sanctions List Search. Save the date and result with their tax form. A search isn't a clearance certificate, and OFAC doesn't issue one. OFAC FAQ 469.
Paying a business? Check who owns it too. A company can be blocked without appearing on the list, under OFAC's 50 Percent Rule. Get advice if the ownership is unclear. OFAC basic FAQs, OFAC FAQ 401.
Paying someone outside the US? Check their country on OFAC's Sanctions Programs and Country Information page too. Some programs cover a whole country.
Got a possible match? Don't pay while it's open. Many alerts are false positives. Compare the full list entry with what you know: other names, nationality, date of birth, ID numbers and addresses. OFAC FAQ 5. Still looks like a match? Get legal advice on the prohibitions, licences and exemptions before you do anything with the money. OFAC doesn't confirm or clear matches for you. If you must block property or reject a payment, report it to OFAC within 10 business days and keep the records. OFAC FAQ 5.
Set commission terms before the first sale
A sale can become a refund or a chargeback after you've paid commission on it. Customers can dispute a card payment months later. See dispute time frames.
Write these into your affiliate terms before anyone earns:
- How long a sale waits before its commission is approved
- What happens to commission on a refunded or disputed sale, before and after you've paid it
- When you pay, how, and in which currency
Some disputes still arrive after the wait ends. Your terms decide whether you can recover that commission, so keep the order and payment records together.
That's for commission on sales. A contractor's fee for finished work is a different deal. Pay it on the terms you agreed.
A partner's sales keep coming back as refunds or disputes? Check the signs of affiliate and paid-promotion fraud.
Bank details changed?
Treat a request to change where you send someone's money as unconfirmed until you've checked it. Call the payee on a number you already had, not one in the request. Hold the next payment until they've confirmed. It's the same scam that redirects supplier payments: vendor banking change fraud.
Check new payees against a contract and real work too. Invented contractors are a known inside job: 1099 contractor manipulation.
If a platform pays them for you
Some platforms collect tax forms, search sanctions lists and send the payouts for you. Get its answers in writing before you move payees onto it:
Who collects W-9 and W-8 forms, and where are they stored? Who files the 1099s, and in whose name? Who searches sanctions lists, and when? Who pays if money goes to the wrong account? What does each payout cost, and in which currency?
Keep its answers with your program terms.
| Your setup | Do this next |
|---|---|
| A few contractors | Keep each payee's tax form, search result and bank confirmation in one folder. |
| Dozens of affiliates or creators | Use a written onboarding checklist, and review approved commissions before each payment run. |
| Payees in several countries | Ask your accountant about each country before adding payees there. |
This page covers US federal rules for business payments to people who aren't your employees. It doesn't decide whether someone's an employee. Your state can have its own filing rules. Paying people abroad can bring foreign tax and reporting duties too. Check those with your accountant before the first payment.
Pick your three most recent payees. Check that each has a tax form on file, a dated sanctions search and a bank account confirmed by phone. Fix any gap before the next payment run.
Next Steps
- Affiliate and paid-promotion fraud: Check a partner whose sales keep coming back
- 1099-K: Match a form you received to the filer's records
- Outbound ACH fraud: Protect the payments you send
- Payout strategy: Plan around when your own money arrives
Sources
| Source | Supports | Opened |
|---|---|---|
| IRS Instructions for Forms 1099-MISC and 1099-NEC | $2,000 floor for tax years beginning after 2025 and possible inflation change from 2027; commissions, fees, prizes and awards for services as nonemployee compensation; card and third-party network payments reported on 1099-K, not 1099-NEC; corporation exception; after backup withholding, the matching 1099 is due whatever the amount; prizes not for services on 1099-MISC; 1099-NEC filing by January 31, next business day rule; Publication 15-A for worker status | 27 October 2026 |
| IRS General Instructions for Certain Information Returns | 1099-NEC filed and furnished by the same deadline | 27 October 2026 |
| IRS Publication 15-A | Employee or independent contractor | 27 October 2026 |
| IRS Instructions for Forms 1099-MISC and 1099-NEC, Rev. April 2025 | $600 floor for 1099-NEC for tax year 2025 | 27 October 2026 |
| IRS Instructions for the Requester of Form W-9 | 24% backup withholding on reportable payments | 27 October 2026 |
| IRS Instructions for Form W-8BEN | Foreign individuals use W-8BEN; foreign entities use W-8BEN-E; services performed in the US can need another form | 27 October 2026 |
| IRS US withholding agent FAQs | Withholding and Form 1042-S reporting on US-source payments to foreign persons; Form 8233 for services in the US | 27 October 2026 |
| OFAC FAQ 11 | Who must comply with OFAC sanctions | 27 October 2026 |
| OFAC basic FAQs | Sanctioned persons can be anywhere; entities blocked without being listed, including under the 50 Percent Rule | 27 October 2026 |
| OFAC FAQ 469 | No non-inclusion certificate or safe list | 27 October 2026 |
| OFAC FAQ 401 | How the 50 Percent Rule treats indirect ownership | 27 October 2026 |
| OFAC Sanctions Programs and Country Information | Country and program list | 27 October 2026 |
| OFAC FAQ 5 | Checking a possible match against the full list entry; false positives are common; OFAC doesn't confirm matches; report a block or rejection within 10 business days and keep records | 27 October 2026 |
| OFAC Sanctions List Search | Free name search of OFAC's lists | 27 October 2026 |