Summary: This article details how to complete and submit your W-9 Form if you’re an Author in the US, as well as some FAQs. It’s worth noting you should complete this form to avoid backup withholding tax being taken from your earnings unnecessarily.
Your situation will determine which tax form you need to fill out.
- US persons are required to fill out a W9 form (you are here!)
- Non-US individuals will need to fill out a W-8BEN form,
- Non-US organizations will need to fill out a W-8BEN-E. form.
While we cannot provide you with tax advice, we have put together this article to help you through the process. This has the caveat that you should always seek advice from a professional accountant/tax advisor because we are not authorised to advise about your specific tax situation, including filling out your specific tax form.
US Authors are required to complete a standard IRS form called the Form W-9 which includes some basic information about you, including a Tax Identification Number (TIN). The TIN can either be your Social Security Number (SSN) or the Employer Identification Number (EIN) of your business.
An Author account has one owner, and it is their details which should be in the Form W-9. That owner can be a corporation or other type of entity, but not a partnership. Partners must nominate one partner to submit a Form W-9. Withdrawals will only be made to the nominated partner.
Backup Withholding Tax
If you do not provide your tax information, we are required by the IRS to apply backup withholding tax of 24% on all your earnings.
Any tax withheld by Envato will be remitted to the IRS, and not held by Envato. We will also be preparing and filing Forms 1099 with the IRS that will show the amount of your gross earnings and taxes we paid from your earnings. You will be provided a copy of your Form 1099 no later than 31st January in the year following the year you made your earnings. These forms can be provided to your tax accountant to assist with claiming any tax credits that may be available.
How to Complete and Submit a Form W-9 to Envato
To help you provide this information quickly and easily, we have provided a form on Envato Market.
The form is available under Tax Information on your Settings page. You can also access the form by copying the following link and simply updating it with your username:
The first section of the form asks you for your personal details. In this section, please provide details including your name, country, and postal address. Please ensure that you provide a complete address because we will use this address to send you a hard copy of your Form 1099, which is your US earnings summary for the year.
You will also need to select the tax classification that applies to you.
The tax classification on the Form W-9 refers to the type of legal entity you choose to run your business. The most common forms of businesses are:
- Sole proprietorships
- Limited Liability Companies (LLC)
A Taxpayer Identification Number is an identification number issued by the United States’ Internal Revenue Service (IRS) or the Social Security Administration (SSA). A Social Security Number (SSN) is issued by the SSA whereas all other TINs are issued by the IRS.
Taxpayer Identification Numbers:
- Social Security Number (SSN)
- Individual Taxpayer Identification Number (ITIN)
|Tax Classification||Description||Tax ID Type|
|Sole proprietorship||Sole proprietorship is an unincorporated business owned entirely by the individual. In general, the owner is also personally liable for all financial obligations and debts of the business.||A sole proprietor must use its SSN on the Form W-9 as its TIN.|
|Partnership||A partnership is the relationship existing between 2 or more persons who join to carry on a trade or business. Each partner is taxed on his share of the partnership net profit or loss.||Partnerships must use its EIN on the Form W-9 as its TIN.|
Corporations are formed under the laws of each state and are taxed corporate income tax separately to the owners. Any earnings distributed to shareholders in the form of dividends are taxed at individual tax rates on the owners’ personal tax returns.
Regular corporations are called C Corporations because Subchapter C of Chapter 1 of the Internal Revenue Code is where you find the general tax rules affecting corporations and their shareholders.
The Subchapter S Corporation is a variation of the standard corporation. An S Corporation is similar to a partnership in that generally taxes are not paid at corporate level. It has the same corporate structure as a standard corporation, except it files an election Form 2553, Election by a Small Business Corporation, to be treated differently for federal tax purposes.
|Corporations must use its EIN on the Form W-9 as its TIN.|
|Limited Liability Company||
An LLC is an entity created by state statute. Depending on elections made by the LLC and the number of members, the IRS will treat an LLC either as a corporation, a partnership or a disregarded entity.
An LLC that has at least 2 members is classified as a partnership unless it files Form 8832 and affirmatively elects to be treated as a corporation. An LLC that is classified as a partnership must use the LLC’s EIN on the Form W-9 as its TIN.
An LLC that has only 1 member is classified as a disregarded entity unless it files Form 8832 and affirmatively elects to be treated as a corporation. An individual owner of a single-member LLC that operates a trade or business is subject to tax in the same manner as a sole proprietorship
A single-member LLC classified as a disregarded entity generally must use the owner’s SSN or EIN on the Form W-9 as its TIN, not the LLC’s EIN.
LLCs that files Form 8832 to affirmatively elect to be treated as corporations should use the LLC’s EIN on the Form W-9 as its TIN.
You’re also asked to fill out your tax ID type (SSN or EIN) and tax ID number. Please make sure you provide the correct SSN or EIN number as the IRS may impose penalties for incorrect SSN or EIN.
In the next part of the form, you need to certify that the information you’ve provided is correct.
Please make sure you understand all the items under this section. The purpose of the Form W9 is to establish your identity and status as a US. person. It is important to note that providing false information is subject to penalties under perjury.
You will also need to acknowledge the certification and provide your name as an electronic signature.
Once you’ve submitted your information look out for the success message at the top of your screen. If you don’t see this there might be an error in your information that you’ll need to fix before submitting again.
If you have any questions about this process, don’t hesitate to contact us at firstname.lastname@example.org. Alternatively, if you need further details, please see the following IRS Help articles:
Frequently Asked Questions
What will we do with this information?
By 31 January each year, we'll send to you and the IRS the appropriate IRS Form 1099 so that you can accurately report your income from the previous year.
Does this apply to non-US Authors?
No, this is a US tax form from the IRS (the US tax authority) for US Persons (including resident aliens).
Definition of a US person (from Form W-9)
For federal tax purposes, you are considered a US person if you are:
- An individual who is a US citizen or US resident alien, or who satisfies the substantial presence test,
- A partnership, limited liability company, corporation, company or association created or organized in the United States or under the laws of the United States,
- An estate (other than a foreign estate), or
- A domestic trust (as defined in Regulations section 301.7701-7)
What’s this process for?
This process is to help US Authors to report their earnings properly and to make sure that the appropriate taxes are applied.
What happens if I don’t complete my tax info until after withholding starts?
As any amounts withheld prior to receiving your tax information will be sent to the IRS, we are unable to give you a refund. However, we will send you an earnings summary (Form 1099) which will show the earnings that you had and the taxes that you paid before your submitted your tax information. You may provide this statement to your tax adviser/accountant to see if you are eligible to claim tax credits in your country.
How secure is my tax information stored with Envato?
We take your privacy and information security seriously and will use industry standard practices to securely store any details you provide in this form.
What documentation will I get about amounts withheld?
You will be able to see tax withheld on your statement page and we will also send you a Form 1099 on 31 January following the year you had your earnings.
Should I be seeking tax or legal advice?
Anytime you earn money as an independent contractor, freelancer, or through an online service, you should make sure you have informed your accountant or tax advisor so they can help make sure that you are correctly paying your taxes.
What if there are multiple owners of the account?
Envato Market enters into a legal agreement with the person who creates an account and agrees to the terms and conditions. If you are a US Person (a definition which includes Partnerships, LLCs amongst other things, as well as individuals) then you should complete the Form W-9 details.
An Author account has one owner, and it is their details which should be in the W-8. That owner can be a corporation or other type of entity, but not a partnership. Partners must nominate one partner to submit a W-8 or W-9. Withdrawals will only be made to the nominated partner.
What additional documentation will you be collecting?
We regularly receive information from different sources and in cases where this information contradicts information you provided us we may need to get in touch with you and get clarification.
I’m a US Person, but I reside elsewhere or am travelling
You should consult your tax advisor. If you are liable for tax in the US, please ensure you complete the steps to submit your information.