What tax information do you need?
- For US citizens, we are required to collect Form W-9, the form on which you report your taxpayer ID number: either your Social Security Number (for an individual US citizen) or your Federal Tax ID (if you are a US business).
- If you are an individual or business who is not a US taxpayer, we will ask you to complete a W-8 Form with a foreign identification number.
- If an artist does not provide a U.S. or Foreign TIN, then they will not be eligible to make a claim for a reduced rate of withholding under a tax treaty.
I submitted tax documents in the past, why is Spoonflower asking me to submit them again this year?
- As required by the IRS, we must collect up-to-date tax information from all Spoonflower artists every year. This tax year, we're upgrading our tax information collection system to be more secure, accurate, easier to manage, and available in more languages!
- For your security, we cannot migrate previously submitted tax information from our old system (RightSignature) to our new system (Avalara). This means that, even if you submitted your information to Spoonflower in the past, you'll still need to resubmit your information.
- We’re asking you to submit as soon as possible so we have time to confirm all artists information has been correctly entered into Avalara before the IRS deadline.
Important! We will be required to remove your ability to sell through Spoonflower if you do not submit your information in time. We don't want that!
How do I submit my tax information securely?
- Avalara provides a secure way to input your tax information through the tax info tab of your Spoonflower account page.
- Do not email your completed tax forms; email is not a secure form of transmission and your account will not be updated. If you have any questions, please contact us at taxinfo@spoonflower.com.
I have earned a small amount of royalties but have only ever used it (or plan to use it) to buy fabric. Do I still need to complete the form?
- Yes. We ask that every designer who participates in the Spoonflower marketplace as a seller complete a Form W-9 (for US designers), W-8BEN or W-8BEN-E (for non-US designers), regardless of how they plan to use their Spoondollars.
I just use my Spoondollars for ordering swatches and proofing designs, which is part of my business. So I’m actually spending more than I make!
- You should consult with your tax advisor regarding whether you are able to deduct swatches for proofing, or other Spoonflower-related purchases, as a business expense. But we remain obligated to collect tax information and, above certain dollar thresholds, to report your earnings to the IRS.
What if I don’t complete the form? Can I continue to sell designs and earn royalties?
- Unfortunately, not. Should we not receive your tax documentation via the tax information tab on your Spoonflower account page, you will not be able to make your designs available for sale, and any designs already available for sale will be removed from the Marketplace as of January 2023.
The money I have earned in Spoondollars sits in my account and I have no plans to use it. Do you still need me to complete tax information?
- If you plan to participate in the Spoonflower Marketplace as a seller, we need you to complete the tax forms regardless of how much you have earned or how you plan to use the funds.
I already report any money I make through hobbies as “other income” on my tax return. Do I still need to complete a W-9 and if so, would it change how I report this income?
- You should report any income earned from royalties on your income tax. However, we still need to collect tax information from sellers and report the Spoondollars they earn on Forms 1099 or 1042-S as appropriate.
I would rather not send my SSN via the Internet. Can I fax or mail a copy of this document to you instead?
- A lot of people have this concern, and we totally get it. We’re using a secure third-party to collect the documents called Avalara CertCapture & CTI, which uses advanced encryption technology and is far more secure than any other submission method, including email, fax, and post. You can see that company’s security help page here. The personal information you provide on the form, apart from your name and address, will not be held in the Spoonflower database at all, and will be accessed only by our financial team when and if they are required to report the data to the IRS.
I live outside the US and do not understand why the IRS wants this information from me. I pay my taxes in my own country. Why do I have to provide this information to the US?
- The Internal Revenue Service (IRS) requires Spoonflower to report all the money it pays to non-US persons earning US-source income and, in some cases, to withhold taxes from the amounts it pays out. To comply with the IRS requirement to report and withhold, we need you to complete the W-8BEN or the W-8BEN-E. Payments to you for use of your designs (i.e., royalties) are US-source if the designs are used in the US. Please note that when you complete the W-8 form, there is a field where you can note if your country has a treaty with the US that reduces or eliminates the obligation to withhold taxes from your payments. A chart showing treaty rates for royalties by country is located on page 51 of IRS Publication 515, available at www.irs.gov/pub/irs-pdf/p515.pdf.
Can I choose to make my designs available for sale without earning royalties?
- This is not possible. You can still make your designs public without making them available for sale.
Will I be taxed on Spoondollars given to me by customer service in lieu of a refund or for some other reason?
- In general, if our customer service team gives you Spoondollars, they are not considered income and will not be taxable. Please consult your tax advisor if you have questions about specific credits or compensation.
Will Spoonflower withhold taxes on my behalf?
- Spoonflower will not withhold taxes from Spoondollar royalties for US-based designers or those located in treaty countries. We will send you a 1099 form annually (or 1042-S for non-US sellers) that will show the amount you have earned in royalties on Spoonflower for the year.
- Please note: If an artist does not provide a U.S. or Foreign TIN, then they will not be eligible to make a claim for a reduced rate of withholding under a tax treaty.
I run a business outside of the US. It looks like the W-8 is for individuals; is there another form I need to fill out? When filling the form, it asks for our birthday but we are a company, not an individual, so do not have a birthday date. How should we proceed?
- If you are a non-US entity rather than an individual, please use form W-8BEN-E, which can be found here. Please select this option when completing your forms under the Tax Info tab of your Spoonflower account.
How will you send me my 1099?
- Spoonflower will email you your 1099 (or 1042-S) via a service called Track1099, to the email address connected to your Spoonflower account. Should that email bounce back for any reason, we will mail a copy to the address you provided when you filled out your tax information tab.
I receive a 1099 from PayPal for my Spoonflower sales, will Spoonflower still issue a 1099 for the same income?
- Our tax advisors indicate that unless we have a record indicating the income is otherwise being reported to the IRS, we are still obligated to issue a 1099. If you have received a 1099-k from PayPal for income resulting from the sale of your Content through Spoonflower and don't want to deal with complicated tax reporting and avoid challenges of potential double reporting you can send a copy of your PayPal 1099-k to Spoonflower at taxinfo@spoonflower.com. This will allow Spoonflower to amend your Spoonflower 1099 to reduce it by the amount of corresponding income on the PayPal 1099-k. By sending your PayPal 1099-k you acknowledge that Spoonflower will have to keep a copy of the record on file in the event Spoonflower gets audited by IRS. By sending a PayPal 1099-k to Spoonflower, you are representing that the income reflected on the statement relates to the sale of Content through Spoonflower. You are ultimately responsible for ensuring that the income you report to the IRS is correct.
Why does Spoonflower refer to earnings from the sale of my designs as “Royalties”?
- When you choose to sell your designs on Spoonflower, you retain all rights and ownership of your artwork. Your artwork remains your intellectual property.
Spoonflower pays artists a royalty from each sale of their design. Spoonflower sells artists designs worldwide.
Avalara defines royalties as:
“Royalties” - Payments received as consideration for the use of, or the right to use any copyright of literary, artistic or scientific work including films, any patent, trademark, design or model, plan, secret formula or process, or for information concerning industrial, commercial or scientific experience.
“Other Royalties” - Royalties paid for the use of copyrights on books, periodicals, article, etc., except motion picture and television copyrights.
Which Tax form should I fill out?
Generally, US taxpayers should fill out form W-9.
If you are not a US taxpayer, you will need to complete one of the following W-8 Forms:
-
- Form W-8BEN (Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals))
- Form W-8BEN-E (Certificate of Status of Beneficial Owner for United States Tax Withholding and Reporting (Entities))
- Form W-8ECI (Certificate of Foreign Person’s Claim That Income is Effectively Connected With the Conduct of a Trade or Business in the United States)
- Form W-8EXP (Certificate of Foreign Government or Other Foreign Organization for United States Tax Withholding ad Reporting)
- Form W-8IMY (Certificate of Foreign Intermediary, Foreign Flow-Through Entity, or Certain U.S. Branches for United States Tax Withholding and Reporting)
-
Please reference the IRS form instruction links above or consult your tax advisor for further assistance.
US Taxpayers: How do I submit a W-9 Form with Avalara CertCapture?
-
You must be logged in to your Spoonflower.com account
-
Select “Account” from the navigation menu, then click “Tax Info” to enter your password
-
Click the “Complete Seller W8 or W9 Tax Form” button
-
Select “I am a US resident...”
-
The following screens will ask you to fill out your information for your tax documentation
-
Sign and submit your document
-
Once done, you should see a green check mark next to your seller tax documents on the “Tax Info” tab of your account settings. If not, please go back through the steps above or reach out to customer service.
International: How do I submit a W-8 Form with Avalara CertCapture & CTI?
-
You must be logged into your Spoonflower.com account
-
Select “Account” from the navigation menu, then click “Tax Info” to enter your password
-
Click the “Complete Seller W8 or W9 Tax Form” button
- Fill out the "Your Tax Information" with your full name and address. If you have trouble with the zip code, please see the troubleshooting steps below.
-
Select one of the “I am a non-US resident...” options.
-
If you're not sure which one to select, use form section above to help you decide.
-
The W8-BEN form is the first option. See the below screenshot with markup
-
You’ll need to create an account to fill out a W8 form. Choose your tax classification and then click the “Create Account” button. Below this button, you’ll see a link to https://dw8.taxsolutions.spglobal.com/, a Vendor ID and a Registration code. Open the link in a new tab or window.
-
Copy the Vendor ID and Registration code from Spoonflower.com into Avalara’s W8 login site. Avalara will also email you your Vendor ID and Registration code
-
Use your registration code again on the next page as the "Old Password". Then, choose a new password that's memorable to you and meets the suggested guidelines, and confirm it a second time.
-
Then, Avalara will ask you to confirm your email address and will then send you a PIN to that email address. Please use the same email address that you use to login to Spoonflower.com
-
You’ll get an email from "D-W8 Administrator” with your PIN. Use the PIN from your email to finish setting up your Avalara W-8 account.
-
Once your account is set up, Avalara will help you fill out your W8 form by asking you questions. Please be sure to answer each question as accurately as possible to ensure you fill out the form correctly.
-
Please be sure to supply a foreign TIN (Tax Identification Number) if you have one. If you do not provide a U.S. or Foreign TIN, you will not be eligible to make a claim for a reduced rate of or exemption from withholding under a tax treaty.
-
If you are not a US taxpayer, and pay taxes in one of these countries, then you are eligible to make a claim for a reduced rate of withholding or exemption from withholding under a tax treaty. Please see the section below for more information about treaty benefits and withholdings.
-
At the end, it will again ask you for the PIN that was emailed to you in an earlier step before you can submit your document
-
Once you’re done, you will see this confirmation page where you can download a copy of your finished document
-
Please note that it may take up to 1 full business day for Avalara to verify your tax information and send it back to Spoonflower.
-
After 1 full business day has passed, you should see a green check mark next to your seller tax documents on the “Tax Info” tab of your account settings. If not, please reach out to customer service.
Do I need to claim Tax Treaty Benefits as a Non-US based Artist?
Tax Treaty Benefits are used to determine if an artist is subject to withholdings on Royalty earnings.
If you are not a US taxpayer, and pay taxes in one of these countries, then you may want to claim tax treaty benefits to take advantage of a reduced rate of tax or exemption from tax as defined by the treaty.
If you do not claim tax treaty benefits, we must withhold 30% of your Royalty earnings.
Below is a sample of what it could look like to claim tax treaty benefits. However, it’s important that you consult your tax advisor on if and how you should claim treaty status based on your specific tax situation.
For tax treaty benefits to be applied, all 4 check boxes must be checked. The rate of withholding chosen should match the rate shown in the treaty. You can find the treaties here
Troubleshooting
What should I put as my "Signer Title" when I sign my W9 form?
When you finish your W9 form it will ask you to sign your name and provide your "Signer Title". You can put the title that best describes your role, such as "Owner", "Accountant", "Designer", etc. This doesn't need to be exact, just whatever you think describes you best.
I put all the W9 form information in correctly, why won’t it accept my form?
- If you see one of these errors: “Failed to Validate Tin” or “No IRS Match found. TIN and Name combination does not match IRS records” it means there is a mismatch between your taxpayer name and TIN.
- If you are an individual, you must use the name used on your taxes and government ID. This name should also match your TIN (tax identification number: EIN or SSN). For example, you cannot put your personal name Jane Doe as the taxpayer and then use the EIN for your LLC as your TIN.
- If you are a company or LLC, you must put the name of your LLC in the taxpayer name field. Do not put your personal name.
- You must put the exact name that your company is registered as with the government. If you can’t remember, try different possible variations. Leave off the LLC or INC part at the end. Choose no for the next question down about doing business under another name. (Unless your company sometimes goes by another name)
- If you see an error that says “Unable to validate Tin. Try again later” next to the field where you put you TIN (Tax Identification Number: EIN or SSN) this means that the IRS’s verification system is currently down for maintenance. Try again in a few hours. Additionally- you can check the IRS’s system status here
What do I do if I see the Error Message “You do not have a request code”
If you receive the error message "You do not have a request code", it means that the system is delayed in creating your Avalara account. If you wait 1-2 minutes and then reload the page, you should be able to continue.
What do I do if I can’t enter my international postal code?
If the page is not accepting your international postal code. You can put “00000” in temporarily so you can continue. There will be a step later on where you can put in your correct address information that will be used on your W8 form.
What do I do if I’m having trouble logging into my W8 Avalara/CTI account?
You are getting this error: “The login credentials you have provided do not match our records. Please reference the form solicitation message or contact 206-826-2252.”
If this is the first time you have tried to fill out a W8 document and you’re seeing this error at login:
This is often because the system couldn't create your W8 Avalara account because you had special characters in your address in a previous step. And if it can't create your account, then you have no account to log into. The form should be able to handle special characters, like accents over letters, but it might be having trouble with it right now.
- To fix this, go back to the first page where you put in your address and remove all the special characters from your address.
- Continue the process as normal from here
- Click the "Create Account" button again and then try to login again.
If you were able to login to your W8 account in the past but now you no longer can:
- Try to use that new password that you created to log in. You can keep using same Vendor ID as before as well.
- Go here and try forgot password one more time https://dw8.taxsolutions.spglobal.com/federalformrequest/SecurityModule/Register.aspx
- You must use the same email address that is linked to your spoonflower account
- Search your email box for an email with the subject line "D-W8 Password Reset".
