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What is backup withholding tax?

Disclaimer Regarding Tax Information: Spreadshirt aims to make payments and legal tax compliance as easy as possible for our Partners. The following is for informational purposes only. Spreadshirt is unable to give tax or legal advice. If you have questions or concerns about tax filings, please contact a tax professional.

Withholding Based on Invalid TIN. The Internal Revenue Service (”IRS”) requires Spreadshirt to withhold a certain percentage of federal income tax if:

  • You do not provide a valid TIN; or
  • The IRS notifies us that your name and TIN do not match IRS records.

If the above applies to you, Spreadshirt is legally requiredto withhold at least (i) 24% tax for US residents or (ii) 30% tax for non-US residents, on all payments.

Withholding Because Partner is a Foreign Individual or Entity. The Internal Revenue Service (”IRS”) requires Spreadshirt to withhold a certain percentage of federal income tax if a partner is a non-US resident or business entity. Under US tax regulations, a mandatory 30% tax is withheld.

State Withholding. If you are subject to the federal backup withholding described above, and you are a resident of California, Vermont, and Maine, you are also subject to state backup withholding.

Reducing Backup Withholding. If we are required to withhold income tax on your behalf, we will reduce your compensation payment accordingly. Spreadshirt will report and pay any and all withheld tax to the IRS and/or State tax authorities.

However, you may be able to reduce tax withholding in whole or in part if you:

  • Provide a valid and accurate TIN; and
  • Submit the correct IRS Form (e.g., Form W-9 or W-8).

Please submit your complete and accurate W-9 or W-8 Form to taxation@spreadshirt.com.

We provide fillable Forms in Account > Tax status. You may also access the Forms here: W-8BEN Form and W-9 Form.

Which Form do I need to provide?

For US residents, citizens, or businesses, more information can be found here.

For non-US residents, foreign citizens, or foreign businesses, additional information can be found here.

If I provide my TIN and W-Form, can I get a refund if backup withholding was applied?

Unfortunately, once we withhold and remit the amounts to the IRS or State tax authorities, we cannot legally refund the withholding.

How do I get the backup withholding back?

Spreadshirt provides eligible Partners with certain tax Forms, such as 1099-MISC, 1099 NEC, or 1042s. When filing your income taxes, you may be able to file the provided Form as well. You may be able to claim the amounts withheld as credit toward your income tax liability, or you may receive a refund from the IRS. Please note that this is not tax advice and is provided on an informational basis. If you have questions or concerns about tax filings, please contact a tax professional.