Is it law to have on file the affiliate’s W-9 form, or is it legal to have their EIN # w/o the W-9 form? Seems like it’s imperative to have the form on file. Thanks!
There is no requirement to have any such information for affiliates. They are not employees or contractors to you. They are simply referrers. You are allowed, if they agree as a condition for being a referral partner, to maintain what information you wish, but there is absolutely no requirements for it…again, they are in no way employed by you.
Google’s my friend and what I found was that we did need to collect a physical w-2 copy.
Here’s one example https://www.aweber.com/affiliate-agreement.htm from aweber’s affiliate agreement.
We’re paying out thousands of dollars…and I believe it’s best in the long run to protect ourselves.
So you mention a w-2 which is for tax declaration. They make no mention of a w-2. They refer to a w-9 which is required for employees of US companies to fill out when they are hired by a company, to prove that they are a citizen, a legal alien with a work visa or have some other special provision for working in the US.
Aweber is 100% wrong in claiming that those you pay affiliate commissions to are required by US law to submit a w-9. They are not employees any more than someone in india or china or mexico are employees and yet, they can be and are affiliates. Were that not to be the case then you would not be allowed to have them as affiliates because you would not be able to confirm them as having a right to work in the US (which of course, most would not be).
They are not US employees and do not require proof of their right to work in the US. If this were not the case then they would be sales men hired by the company and would require all of that (and then some) but they are not employees and do not require proof of right to work as they are not being hired in the first place. This is good news for you because you would then have to pay workmen’s comp premiums every month for each of them.
As to “Google being your friend”? You’re setting yourself up for dis-appointment and a lot of extra work if you hold on to that idea. It’s great for research but ONLY if you don’t consider it to be a final authority on any subject, as it will never be. AWeber is simply overplaying/overstating it and that’s their choice. Your question was in regard to it being law and it categorically is not.
If, for your own reasons, you wish to collect such information, that is up to you, of course, but there is no requirement for you to do so. The only conceivable reason would be if you had a special 501c(3) case that involved those payouts as a deduction on taxes and then you would only need the information to prove where the money actually went (as apposed to it being a law or requirement to actually do so).
Thank you, John, for your thorough response.
Most affiliates don’t require such records just because their business residence is not registered in the US. I barely can name much of them that is. Especially some solid ones. Cyprus is their favorite spot. But yet, there’s nothing illegal about it, you can have an assistance from the IRS in person or this tool that is made on the purpose of working with such papers https://w9.pdffiller.com/ Anyway, that’s the matter of principle