Steve Sokolowski wrote:pavvappav wrote:Steve Sokolowski wrote:
So far our plan is not to issue the forms to international customers. While that might change if we hear otherwise, I haven't been advised that international customers are affected.
Understood. I included the links to IRS regulations to cite my sources. With penalties for failing to report income paid to independent contractors upwards of $250 per incident/account, I'm certain that Prohashing is going to make sure everything is on the level.
Customers who locate mining equipment in the United States will have to receive a 1099 form. Customers who have no connection with the United States - who live elsewhere and who have their miners elsewhere - are not affected.
Steve, your paying non-residents similarly as you are paying residents. You have classified residents as contract employees, hence the 1099-MISC.
Because the person is a non-resident does not exempt them from reporting requirements. In-fact, you may be legally required to perform withholding of taxes for income paid to non-residents, and report that income and withholding via 1042-S form (https://www.irs.gov/pub/irs-pdf/f1040es.pdf).
The requirement is that Every withholding agent or intermediary, whether U.S. or foreign, who has control, receipt, custody, disposal or payment of any fixed or determinable, annual or periodic U.S. source income over foreign persons, must file these forms with the IRS. For example, employers that employ non-resident aliens (such as foreign workers or foreign students) would need to file a 1042-S Form with the IRS for every non-resident alien they employ and also send a (completed) copy of that form to the non-resident alien they employ.
Refer to https://www.irs.gov/individuals/interna ... -must-file. The page also lists exemptions for who does not need to file for payments made to Non Resident Aliens (NRAs).
It doesn't matter where their miner is located -- it matters where the transaction takes place. I presume you are issuing the payments from a server located within the United States.