1099-misc

[f1c8ef54]

I don't understand why Upwork doesn't send a 1099-MISC at the end of the year. Is there a reason? They asked for my SSN and a W-9, but don't send 1099? If they don't send me a 1099, are they still reporting the income to the IRS?

There is like a 100% chance my income won't match to the penny what they report if I'm not getting 1099. 

I don't qualify for a 1099-K per their website.

[BojanS]

Hi Erika,

If you did not receive a 1099-K or 1099-MISC form from us (we only send it when certain IRS criteria is met), we can issue you one upon request. Please contact our support team by clicking Get Help at the bottom of this page.

Thank you!

[f1c8ef54]

I earned more than $600 this year (this is my first year on Upwork) and should be getting a 1099-misc but according to that link it says Upwork is not sending one. I want to know why.

I didn't take more than 250 transactions this year (I only worked for 35 weeks) and so I don't qualify for a 1099-k.

[BojanS]

Hi Erika,

You can check this Lena's announcement for more information that might address your concerns.

Thank you!

[tlbp]

The short answer is that Upwork isn't legally required to send the 1099 Misc so they don't. (I don't know exactly why. Perhaps because Upwork isn't the "employer/payor" of the $600 but just serves as a conduit?)

You can still report your earnings. If you are using a self-serve tax application, just indicate that you had income and didn't receive a 1099 and the program should walk you through how to disclose the income. I believe you'll use the Schedule C to report the income and you'll need to fill out another form for your self-employment taxes. 

ETA: Looks like a gap created by the tax laws (https://support.upwork.com/hc/en-us/articles/211067918-Tax-Requirements#:~:text=Under%20the%20Intern....)

Under the Internal Revenue Code Section 6050W, you don’t need to file Form 1099-MISC for freelancers paid through Upwork because you’re not paying your freelancer directly.

When you pay your freelancer on Upwork, you actually pay Upwork Escrow Inc., which is our licensed escrow subsidiary. Upwork Escrow Inc. acts as a “third party settlement organization” under Section 6050W. This means we (not you) are required to report the payments we remit to your freelancer to the Internal Revenue Service (IRS) on Form 1099-K, in accordance with IRS regulations.

Even if your freelancer does not receive enough payments for Upwork to file a Form 1099-K for them, you still don’t file a 1099-MISC because you’re actually paying a “third party settlement organization” rather than your freelancer.

[073da699]

Do I need to send you guys a 1099-MISC for $5,257.30 from **Edited for community guidelines**
If so, can you send me a W-9 please.
Thank you!

**Edited for community guidelines**

[BojanS]

Thank you for reaching out to us, Kevin.

One of our team members will reach out to you directly to assist you with your request. 

[excelcpa]

Can you post the link you referenced? I too did not receive a 1099 and should have qualified. Based on updated IRS rules, I am fairly certain it should be a 1099-NEC for payments received in 2020 and later.

I saw something on Upwork’s website that suggested they no longer needed to send 1099-Misc in 2020 but no justification was given as to why. I cannot understand what Upwork’s position on this could possibly be.

[mwiggenhorn]

Their position seems to be that they are not the person who paid you - they are simply the means by which you receive your pay.  Just report your Upwork earnings as Misc. Income.  I do and I have never had a problem.  Once, I had a client who asked for my information and issued a 1099.  Once in 8 years.

[patchworksvideo]

Posting to clarify this, particularly because it's become a highly-discussed topic again, and folks have been confused. I know I had to dig around a bit to understand it.

From the IRS instructions for forms 1099-NEC and MISC (emphasis added) as of January 2023:

Payments made with a credit card or payment card and certain other types of payments, including third-party network transactions, must be reported on Form 1099-K by the payment settlement entity under section 6050W and are not subject to reporting on Form 1099-NEC. See the separate Instructions for Form 1099-K.

Upwork Escrow acts as a third-party settlement organization, and therefore falls under 1099-K (see F....

As a result, no client should be sending a 1099 to a freelancer for payments made through Upwork, regardless of amount. Even if it "feels like the right thing to do," or "just to be safe," it is incorrect by the 1099-NEC and 1099-MISC instructions.

Otherwise, what'll start happening, especially for the 2023 tax year when 1099-K forms get generated to report amounts over $600, is that a client sends a 1099-NEC, AND Upwork sends a 1099-K, for the same money. Then, the freelancer ends up trying to explain to the IRS why their numbers aren't matching up with those dual forms. Beyond that, clients on here don't need a freelancer's SSN or EIN to begin with. Upwork handles that.