How to Report Income Earned From Worksome (U.S.)
If you are a worker whom the Internal Revenue Service (“IRS”) defines as a “U.S. Person” for tax purposes, you must report all income you earn through Worksome on your federal (and, where applicable, state) tax returns, even if you do not receive a tax form. Below is an overview of how Worksome issues tax forms depending on your engagement structure, along with guidance on reporting responsibilities.
W-2 engagements (on EOR payroll)
If the nature of your engagement is classified as an employee, you will be onboarded via Worksome’s payroll solution. In this scenario, Worksome typically serves as your direct Employer of Record and is responsible for:
Withholding, remitting, and reporting all required employment taxes, and
Issuing you a Form W-2 for the relevant tax year.
How to Report:
You report your W-2 wages on your individual tax return (Form 1040) consistent with IRS requirements, just as you would with any other employer-issued W-2. If you are onboarded to one of our EOR partners, they are responsible for issuing your W-2 form.
1099 (Independent Contractors):
If you are classified as an independent contractor, you are responsible for reporting and paying self-employment taxes (where applicable). Whether Worksome issues a Form 1099 depends on who is the contracting party:
When Worksome Acts as Agency of Record (AOR)
Worksome (or its affiliated entity) is the contracting party.
If you are a U.S. Person who earns $600 or more in a calendar year through Worksome under this arrangement, Worksome will issue you the appropriate Form 1099 (most commonly Form 1099-NEC).
Note: Even if your total earnings are below $600, you are still required to report all income to the IRS.
When Worksome Is Not Agency of Record
Your client (the hiring business) is the contracting party.
In most cases, Worksome will not issue a Form 1099 because we are not the payer or the contracting entity.
If your total earnings from that client meet or exceed $600, you may receive a Form 1099 (commonly Form 1099-NEC) directly from the client.
Regardless of whether a Form 1099 is issued, all income must be reported on your tax returns.
1099-K (Third-Party Settlement Organization)
Worksome may, at times, act as a Third-Party Settlement Organization (TPSO) if it only facilitates payments between you and your client. Historically, a Form 1099-K was issued only if you received over $20,000 and processed over 200 transactions in a calendar year through a third-party settlement organization.
Legislation changes have introduced a new lower threshold for Form 1099-K reporting. However, the IRS postponed implementing that lower threshold. Beginning with 2023 returns (filed in 2024), the threshold is set at $600 in aggregate transactions. (Note: The IRS has delayed enforcement in some cases, so keep an eye on IRS guidance, which can shift legislatively.)Future tax years may be subject to the $600 threshold unless further IRS guidance or legislative changes delay or modify it. Certain states may have their own, separate 1099-K thresholds.
If your earnings through Worksome exceed the relevant federal or state thresholds, you may receive a Form 1099-K. It remains your responsibility to track and report all income, even if you do not reach the threshold for a Form 1099-K.
Accessing Your Earnings in Worksome
To help you fulfil your tax obligations, you can review your annual income in the “Payment Requests” section within your Worksome account. This gives you a breakdown of the payments you have received. If you need additional records, please reach out to Worksome Support.
Disclaimer: This article provides general information regarding when Worksome issues certain tax forms and does not address every tax scenario you may face. Always seek personalized advice from an independent tax advisor or attorney to ensure you meet all federal, state, and local requirements.