Set up W-9 collection

Before you begin

Decide whether you will track eligibility by email (default) or External user ID. If using external user IDs, add the field and include it on every order (UI or API). Mixing strategies could split reward volumes sent to the same recipient.

Review the latest W-9 collection threshold changes and update your internal policy accordingly.

You’ll configure: Tax Entities, W‑9 collection, recipient identifier strategy, recipient-level W-9 decisioning, TIN validation, and US-person validation.

Steps

1. Create a tax entity: Select which teams will track reward volumes for W-9 collection.
2. Enable W-9 collection: Set tax entities to collect W-9s when recipients hit the collection threshold.
3. Enabling 1099 e-delivery consent collection: Collect consent during redemption so you aren’t mailing forms later. Consent lasts until withdrawn.
4. Choose your recipient identifier strategy: Include your own custom recipient identifier on orders, or stick with email tracking.
5. Override W-9 collection for a reward: Decide whether to request or skip W-9 collection for a specific reward.
6. Configure TIN validation & review settings: Enable real‑time TIN matching; choose how to handle TIN validation failures.
7. Configure US-person review settings: Hold rewards for recipients claiming to be non-US persons.

Success looks like: Recipients who cross the threshold are gated at redemption, can complete a W‑9, optionally pass TIN validation, provide e‑delivery consent, and proceed to redeem.

Creating tax entities

Tax Entities represent the legal entities used by your business to report annual payouts to the IRS. Tremendous aggregates recipient reward volume across all teams assigned to a tax entity.

You can create multiple Tax Entities to match your business structure and assign teams accordingly.

Example of Tax Entities in action:

1. You create a Tax Entity named "My Tax Entity" and enable W-9 collection.
2. You assign your teams "Alpha Team" and "Bravo Team" to "My Tax Entity."
3. "Alpha Team" sends a recipient a $400 reward in January.
4. "Bravo Team" sends the same recipient another $200 reward in February.

When the recipient redeems their $200 reward, they'll be prompted to complete a W-9, and their information will automatically appear in the recipient dashboard for "My Tax Entity."

Steps

1. From the sidebar, go to Taxes → Tax Entities
2. Click Create tax entity or Add entity and enter the legal payer information
3. Assign teams that should roll up to this entity
4. Enable W‑9 collection for this entity (applies across the assigned teams), or skip for now

Notes & edge cases

• A recipient’s totals roll up across all teams in the entity.
• To edit a tax entity, you must be an admin on all of the teams that are assigned to that tax entity.
• Moving teams between entities mid‑year can make some recipients newly exceed the threshold. These recipients won't automatically be prompted to complete a W-9. Contact these recipients directly to collect their W-9 information and manually enter the data into the Recipients section of the dashboard.
• Physical cards & shared emails can create gaps in tracking. See Spotting duplicates for resolution tips.
• Tax entities cannot be deleted as they preserve historical data.

Enabling W-9 collection

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.

Steps

Before enabling this feature, please review what Tremendous tax features do and do not offer.

1. Create a new tax entity or edit an existing one
2. Agree to the terms and conditions of using the W-9 collection feature
3. Enable W-9 collection

Notes

• When you turn on the W-9 data collection feature, Tremendous will present a form to recipients when all 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 payout is in USD.
  4. The recipient has not declared themselves a non-US person in the same tax year.
• W-9 collection is gating, which means recipients must fill in all required fields before they can redeem their payout.

Choosing a recipient identifier strategy

Tremendous offers two methods for tracking recipient reward volume and W-9 eligibility:

1. Recipient email address (default)
2. Client-provided external user ID

We recommend you commit to using either external user IDs or email addresses consistently throughout the entire tax year.

By default, Tremendous tracks W-9 requirements by the recipient email address. However, you have the option to override this default and associate a recipient to a unique user ID that you provide. To successfully track reward issuance by this unique ID, you must provide it on your reward orders.

Steps

1. From the sidebar, go to Team settings → Custom fields
2. Click Add custom field
3. Enter External user ID as the field name
4. Select Text as the field type
5. (optional) Mark the field as required
6. Click Save

Once the field is enabled, it will be an accepted parameter for orders placed via the API and via the dashboard.

Notes

• The external user ID can include numbers or text.
• If rewards are sent to different email addresses but share an external user ID, they will be aggregated for the purposes of W-9 collection.
• Rewards sent without an external user ID will fall back to tracking via email address. If you send two rewards to the same email address but only one has an external user ID, each will belong to a different recipient for the purposes of W-9 collection.

Enabling 1099 e-delivery consent collection

Tremendous tax features allow you to collect consent to deliver recipient tax forms electronically.

Steps

1. From the sidebar, go to Taxes → Tax entities
2. Edit an existing tax entity
3. Click Settings
4. Under Configure consent for e-delivery select Enable
5. Enter the required information
   1. This information populates the terms your recipients see before granting consent. It tells them how to request a physical form, withdraw consent, and other relevant details.
6. Click Save

Once enabled, when a recipient completes a W-9 form, they will also be able to provide consent to receive their 1099s electronically. You can see their consent status from your tax management dashboard.

Notes

Recipient consent can show up in one of three forms, as explained in the table below.

Overriding W-9 collection for a reward

You may need to override the default W-9 collection settings for specific rewards. Using a custom flag, you can either: 1) require W-9 form collection regardless of the recipient’s total reward amount, or 2) exclude the reward from counting toward the recipient's annual reward total.

Steps

1. From the sidebar, go to Team settings → Custom fields
2. Click Add custom field

3. Fill out the form as shown below:

   Name: Force Tax Form

   Type: Dropdown

   Options:

   • none
   • skip
   • w9
4. Mark the field as required (optional)
5. Click Save

Notes

When placing an order, you can now set the Force Tax Form flag for each reward. This determines how W-9 collection will work, as explained in the table below.

Configuring TIN validation & review settings

Enable real‑time TIN matching to reduce filing errors. When enabled, Tremendous can verify the recipient’s Name and TIN against IRS records when collecting a W‑9 submission.

To prevent fraudulent activity, we limit recipients to two attempts at submitting valid TIN information. If there is an issue after two attempts, you have the option to intervene.

Steps

1. From the sidebar, go to Taxes → Tax Entities
2. Edit an existing tax entity
3. Under Automatic recipient TIN verification select Enable
4. Select an option under How do you want to handle rewards for recipients with TIN errors?
   1. Hold rewards for manual review - Gives you the chance to work with the recipient to collect valid information before releasing rewards to them.
   2. Allow redemption - Allows recipients to redeem rewards despite potential validation issues in their W-9 submission. You can work with the recipient separately to collect updated W-9 information.
5. Click Save changes

Notes

• Read Handling TIN validation failures to understand why recipient provided information may not be working.
• If you select Hold rewards for manual review, then all future rewards for this recipient will be held in the review queue until the issue is resolved.

Configuring US-person review settings

When a recipient redeems a reward that puts them over the W-9 collection threshold, they will be prompted to self-report their US-person status. For US persons, a W-9 is required. If recipients identify as a US person, they will be directed to complete a W-9. If they identify as not a US person, they will bypass the W-9 requirement and proceed directly to reward redemption.

Since this information is self-reported, you can intervene if you expect only US persons to redeem rewards.

Steps

1. From the sidebar, go to Taxes → Tax Entities 
2. Edit an existing tax entity
3. Select an option under How do you want to handle rewards redeemed by non-US persons?
   1. Hold rewards for manual review - Gives you the chance to request that the recipient fill out a W-9 because you believe they’re actually a US person.
   2. Allow redemption - Allows recipients to redeem rewards without completing a W-9.
4. Click Save changes

Notes

• If you select Hold rewards for manual review, then all future rewards for this recipient will be held in the review queue until the issue is resolved.