I run a solopreneur online business and it's the first time I've had a U.S.-based affiliate who earned over $600 promoting my products in a year. I understand normally this would require me to send them a 1099-NEC form at the beginning of the next year.
However, the commission payments were made through my Paypal Business account, as that's the affiliate payment system connected to my sales platform, Thrivecart. I'm seeing info online saying "PayPal or credit-card payouts are reported instead on Form 1099-K by the processor, so you file nothing."
So it seems like I should not send the 1099-NEC.
There's also something about the threshold for Paypal 1099-Ks is $20,000 right now. I'm not sure if that changes my consideration, as I only owe this affiliate about $2k.
Can anyone clarify? Thanks in advance.
1099-NEC to affiliate paid through Paypal?
byu/intentionalMC intax
Posted by intentionalMC
3 Comments
If you pay via Paypal you do not need to send them a separate 1099.
No 1089-NEC, per the instructions of 1099-NEC
You’re using a third party payment processor, they’re subject to 1099-K rules. Doesn’t matter if they actually met the threshold, that’s not your concern.
Thank you for that clarification. I will not send any 1099s since payments are made through Paypal Business.