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Hiring & Paying Independent Contractors

Determine if your vendor should be paid as an independent contractor or as an employee. Review the IRS guidelines on whether to categorize a worker as an employee or an independent contractor to make…

haiba hamilton
Updated by haiba hamilton

Determine if your vendor should be paid as an independent contractor or as an employee

Review the IRS guidelines on whether to categorize a worker as an employee or an independent contractor to make sure you stay on the right side of the law.

Communicate with the contractor about W-9 or W-8 BEN collection

We collect W-9 forms for domestic contractors and W-8 BEN forms for international contractors. If you do not provide one of these documents, then we will request via Tax1099, Melio, or another web tool that we use to collect this information from contractors.

Please let the contractor know to expect this email and complete the information in a timely fashion. We don't process payments without these tax documents. See the article Requesting payment for a bill for more information on that part of the process.

Why do we require W-9 and/or W-8 forms to process payments?
These documents are an IRS requirement for contractors to report annual income and for you to report payments made. Collecting W-9 or W-8 forms before processing payment ensures the smooth processing of 1099s at the end of each calendar year.

Provide a signed contract to ArtsPool

If ArtsPool has processed the contract through DocuSign: Confirm with your FOL in the original task if payment should be automatically processed once the contract is signed by all parties, or create a new Bill Submission task.

If ArtsPool has not processed the contract: Create a Bill Submission task and upload the signed contract and bill payment details. Make sure to include the contractor's email address so that we can request a W-9 or W-8 if necessary.

As of May 15, 2017, NYC's Freelance Isn't Free Act requires that anyone hiring freelance contractors must provide the contractor with a written contract if they earn more than $800 in aggregate in a rolling 120-day window.

Because this is hard to track, it's a good idea to have a contract with every contractor. Learn more about the contract requirements or download a sample contract.

Processing multiple contracts and bills? Discuss the contracts process with your FOL for time-saving solutions.

Domestic contractors

US-based independent contractors require the following for ArtsPool to process payment:

  • A W-9 form to verify their tax classification - let your FOL know in the task if a W-9 form should be requested.
  • The contractor's email
  • A signed contract
  • An invoice that details the contractor's name, address, and the purpose of payment

International contractors

Be sure to communicate with your FOL when engaging a foreign contractor, so we can help determine the necessary steps.

Non-US-based independent contractors require the following for ArtsPool to process payment:

  • A W-8 BEN form to verify the foreign status, country of residence, citizenship country, and claim of tax treaty benefits. Let your FOL know in the task if a W-8 form should be requested.
  • The contractor's email
  • A signed contract
  • An invoice that details the contractor's name, address, and the purpose of payment

Additional information to gather if the work takes place in the US:

  • What percentage of the work will be performed on US soil
  • What is their immigration status in the US
  • Do they have a visa to work in the US and if so, what type
  • Do they have a SSN (please do not share the SSN through the app, just confirm if they have one)
  • In what country is the person a citizen
  • In what country does the person reside
Foreign contractors working in the US may be required to have their tax liability withheld at the time of payment, depending on the payment amount. It's important to determine if the payee's country of residence has a tax treaty with the United States, so we can report the withholding to the IRS.

How did we do?

Tax reporting from third-party payment processors

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