Collect W-9 forms from recipients

Overview

To help reduce your burden at tax time, Tremendous may be able to collect W-9 data from recipients during redemption.

When a US-based recipient has received a total of $600 or more in a calendar year, this feature collects information you will need to issue them IRS Form 1099 at tax time. See how it works in this demo.

Understand this feature

Display criteria. When you turn on the W-9 data collection feature, Tremendous will present a form to recipients when all four of the following are true: 

1. The recipient's unique email address or unique identifier has received $600+ in payouts during a given tax year.
2. The W-9 collection feature has been turned on before the recipient redeems their payout.
3. The recipient is redeeming their payout using a US IP address.
4. The payout is in USD.

W-9 collection is gating, which means recipients must fill in all required fields before being able to redeem their payout.

Tracking. By default, we track the total dollar amount issued to each unique email address.

Alternatively, you can provide Tremendous with a unique recipient ID for each payout you send. Use a custom field entitled External user ID. This provides more thorough tracking since it’s possible for someone to use multiple email addresses or a shared email address. Learn how to configure user IDs here.

If you have sent payouts outside of Tremendous — for example, if you switched to Tremendous partway through the year — you can upload those payout amounts, and Tremendous will factor them into determining W-9 eligibility. We cannot retroactively collect W-9 data, but if subsequent payouts sent through Tremendous contribute to a the cumulative total beyond $600 within the calendar year — whether they’d already gotten $600+, or if the latest payout pushes them over the limit —  we will collect W-9 data during redemption. Learn how to include payouts sent outside of Tremendous for W-9 calculation.

Similarly, if you turn this feature on mid-year, please note that we keep track of payouts sent to a given email address from the top of the year, but we only collect W-9 data during payout redemption. After the feature is turned on, when a new payout contributes to a total over $600 recipients will be required to fill in the W-9 form during redemption. 

Auditing. Because it is your obligation to collect W-9s from any recipient whom you send more than $600 in a calendar year, you may have to collect W-9s yourself in certain cases where Tremendous wasn’t able.

We recommend you review the Order History and Reward History exports, because it’s possible that recipients could have used multiple emails or shared emails. Also, you may have directly sent recipients Physical Visa cards, which are not tied to specific email addresses and cannot be tracked by custom fields.

Compare these with the W-9 Data Export, which covers all recipient emails (or unique IDs) that were issued $600+ each year.

When you send is what matters. Payouts are taxable in the year they were sent, regardless of when recipients redeem the payout. However, Tremendous will not be able to collect W-9 information until the payout is redeemed.

For example, if you send a payout in December that pushes a recipient past the $600 threshold, but they don’t redeem it until later, you may have to collect a W-9 directly from them. 

However, if they redeem the payout in future years it will be included in W-9 data exports for the year of reward issuance that are exported after the reward redemption. For example, a reward sent in Dec 2022 and redeemed on Jan 8 2023 would not be included in a 2022 W9 report exported on Jan 7, 2023 but would be included in one exported on Jan 9, 2023.

Accuracy. When recipients provide W-9 data to Tremendous, they cannot proceed without filling in all required fields in the form. While we do filter for some obvious false entries (e.g., an SSN of 123-45-6789), we do not validate whether the recipient’s provided information (e.g., TIN, address, etc.) is accurate.

No international coverage. Consult a tax professional about compliance in other countries.

Security. TIN data is encrypted in our database, and the download is accessible only by account admins. W-9 information is not shared outside of your account or accessible by third parties. Once you download the CSV, it is your responsibility to take proper care of your recipients’ data.

We do not issue 1099s for you. There are many services that can generate 1099s and send them to both the IRS and your recipients on your behalf. Tax professionals can also do this. Unfortunately, we cannot advise you on this part of the process or make recommendations.

How it works

Turn on W-9 collection

By default, the form is triggered for recipients who redeem more than $600 in the current calendar year.

1. From the sidebar, click Team Settings > W-9 collection.
2. Click Turn on W-9 collection.
3. Select the checkbox to agree with our Terms and Conditions.
4. Click Turn on.

Download W-9 information

W-9 information will be exported in a CSV file.

1. From the sidebar, click Team Settings > W-9 collection.
2. Click the tab labeled Download.
3. Select the tax year of interest.
4. Select the checkbox to include/exclude TINs in the CSV.
5. Click Download W-9.

The download includes all unique recipient emails issued $600+ in the selected year, but only includes W-9 information we collected during redemption. You may have to follow up directly with certain recipients to collect W-9s.