W-9, W-8BEN and what a small program actually has to do

Affiliate tax forms come down to one rule for a US-based brand: collect a W-9 from every US partner and a W-8BEN (or W-8BEN-E) from every non-US partner before the first payout, keep the form on file, and send a 1099-NEC to each US partner whose payments for the year cross the IRS reporting threshold. That is the whole obligation for most small programs. This post is general information, not tax advice; your accountant knows your situation and we do not. What we can do is show the procedure, the arithmetic and the places where small programs usually get stuck.

The reason this matters more for partner programs than for ordinary vendors is volume. A brand paying three contractors can handle forms by email. A brand paying sixty partners in eleven countries, each earning between $50 and $4,000 a year, needs a process that runs itself, or payouts stall and partners leave.

Which affiliate tax forms apply to which partner

There are only three forms you will ever ask for, and the partner's status decides which one.

Two details trip people up. First, a US citizen living abroad is still a US person and gives you a W-9, not a W-8BEN. Second, a non-US partner who performs the promotional work from outside the US is, in the general case, earning foreign-source income, which is why the W-8BEN typically means no withholding and no 1099. If a non-US partner does the work while physically in the US, that changes, and it is one of the questions to put to your accountant rather than to a blog post.

When to collect: before the first payout, not before signup

There is a temptation to ask for the tax form at signup. Resist it. A partner who has not yet earned anything will not fill in a W-9 for you, and the ones who do are the ones you least need to screen. Ask at the moment the form becomes necessary: when the partner is about to appear in a payout batch.

In RelayWonder the sequence is:

1. A partner is approved into a brand's program and starts earning rows in the ledger. No form is needed yet.
2. When the partner's cleared balance first reaches the $50 minimum, their account shows a "tax form needed" step and the brand sees the same status next to the partner's name.
3. The partner uploads the form once, in their own account. Because a partner has one account across every brand on the network, one upload covers all of them. They do not re-send a W-9 to each brand.
4. Our operator reviews the form: is it the right form for the declared status, is it signed and dated, does the name match the account, is the TIN present on a W-9. Review is a check for completeness, not a legal opinion.
5. The status flips to verified and the partner is included in the next batch. A brand exporting a batch sees exactly which partners are blocked on a form and can nudge them.

The important design choice is step five. A payout batch should never be a surprise. If a brand exports on the first of the month and finds four partners missing, it should already have known that for three weeks.

Backup withholding: what happens if there is no W-9

If a US partner refuses or forgets to provide a TIN and you pay them anyway, the IRS expects you to withhold backup withholding at the current rate, which is 24%, and remit it [5]. Here is what that means with numbers. A partner has cleared $900 in commission. With a W-9 on file you pay $900. Without one, you would pay $684, send $216 to the IRS, and file the paperwork that goes with it. For a small program that is a disproportionate amount of work for one payout.

Our recommendation, and the way RelayWonder behaves by default, is simpler: do not pay until the form is on file. The partner's balance waits in the ledger, nothing is lost, and almost everyone uploads within a day of seeing that it blocks their money. So far we have not seen a program on our network need the withholding path; we mention it so you know it exists and can discuss it with your accountant if a partner genuinely cannot provide a TIN.

Issuing 1099-NEC: who, when, and the threshold

The business that pays the partner issues the 1099-NEC. Not the platform, not the payout processor, and not the partner. RelayWonder never holds or moves money, so we are not the payer and we do not file for you. We give you the per-partner totals for the calendar year with the ledger rows behind them. A platform that does hold funds and pays partners from its own account may take on filing; that is one of the things you are paying for in that model, and one of the reasons we chose not to build it that way.

Three facts about the form itself [3][6]:

• Form 1099-NEC reports nonemployee compensation, which is what affiliate commission and content bounties are from the payer's side.
• The long-standing threshold was $600 in a calendar year. Legislation enacted in July 2025 raised the reporting threshold for payments made after 31 December 2025 to $2,000, with inflation indexing in later years. Our description above says $600 because that is the number most people still have in their heads; check the current IRS instructions for the year you are paying, because the figure that applies to 2026 payments is the higher one.
• Copies go to the partner and to the IRS by the end of January following the payment year. The IRS offers a free electronic filing portal, IRIS, that handles small volumes without buying software [7].

A worked example. A brand on our network paid 38 US partners during 2026. Twenty-six of them received less than the threshold and get nothing. Twelve received more; the brand downloads a CSV with each one's name, TIN from the W-9, address and total paid, and files twelve forms through IRIS in an afternoon. The 22 non-US partners with W-8BENs on file receive no 1099 because their income was foreign-source; the brand keeps the W-8BENs and notes their expiry dates.

Keeping forms current

A W-9 does not expire, but a W-8BEN does: it is valid from the date signed until the last day of the third calendar year after that [2]. A form signed on 15 March 2026 is good until 31 December 2029. A partner whose circumstances change, such as a non-US individual who incorporates, needs to replace the form sooner.

RelayWonder stores the signature date and shows the expiry on the partner's account and in the brand's partner list, with a reminder to the partner 60 days before. When a form expires, the partner returns to the "tax form needed" state and the next batch excludes them until a new form is verified. That is the same mechanism as the first upload; there is no separate renewal flow to learn.

Non-US brands paying partners

Everything above is written for a brand that is a US business. If your brand is in the UK, Germany, Singapore or anywhere else, the US affiliate tax forms, W-9 and W-8BEN, are not your forms; they exist because of US law and are collected by US payers. You will have your own local rules on paying freelancers abroad, and they vary enough that we will not summarise them here. What stays the same is the procedure: one form per partner before first payout, stored once, visible before the batch. RelayWonder lets a non-US brand mark which document types it requires, and the same upload-verify-status loop runs.

The payout batch and the tax record, side by side

A monthly payout batch in RelayWonder is a CSV in PayPal or Wise mass-payout format [8][9]. Each line is one partner, one currency, one amount. The batch export refuses to include a partner without a verified form, and tells you who was left out and why. After the brand pays from its own PayPal or Wise account and marks the batch paid, each line becomes a payout row in the ledger, linked to the commission rows it covered.

At year end, the tax export is the same data grouped differently: per partner, per calendar year, sum of payout rows, with the form on file. Because the ledger is append-only, the number you report in January is the number the partner saw in their statements all year. There is no reconciliation step, because nothing was ever edited.

Mistakes we see in small programs

• Asking for forms by email and storing them in a shared drive. Forms contain TINs; they belong in an access-controlled store with a log of who viewed them.
• Collecting a W-9 from a non-US partner because the partner picked the wrong form. The operator check catches this; a form that does not match the declared status is sent back with a note.
• Issuing a 1099 to a non-US partner "to be safe". It is not safer; it reports foreign-source income as if it were US-source and confuses the partner's own filing.
• Forgetting bounties. A content campaign bounty is nonemployee compensation exactly like commission and counts toward the threshold.
• Paying the first batch before the forms are in, then chasing. The chase takes longer than the wait would have.

None of this is hard. Affiliate tax forms are only tedious when the process lives in a spreadsheet and the brand finds out about the gaps on payout day. Put the status next to the partner's name, block the batch instead of the relationship, and the tax step disappears into the background where it belongs.