Report Income from Upwork

If you're a freelancer whom the Internal Revenue Service (IRS) defines as a “U.S. Person” and earn money working with your client through Upwork, you need to report this income on your tax return. And because of changes to the tax laws, freelancers—including those who earned more than $600—will not receive a Form 1099-MISC from Upwork (and your clients are not required to send you a 1099-Misc either).

Freelancers who are not U.S. persons are not required to give us the information in a W-8BEN.

We recommend that all freelancers use your “Earnings by Client” report to accurately document your earnings.

 

Exceptions

Most U.S. freelancers won't receive any IRS forms from their contracts on Upwork. However, there are two important exceptions:

W-2

Employees paid through Upwork Payroll

If you and your client agreed that you are an employee, you must be hired through Upwork Payroll. When you use the Upwork Payroll service, our staffing provider will be the employer, handle all of the withholding and payment of taxes, and provide a Form W-2.

1099-K

Freelancers who are U.S. Persons and receive over $20,000 with more than 200 transactions through Upwork

Qualifying freelancers will receive a form called the Form 1099-K (not to be confused with the more common 1099-MISC). Under the Internal Revenue Code Section 6050W, Upwork will file a Form 1099-K form with the IRS for you, and you will receive a copy of your Form 1099-K via U.S. Postal Service by January 31. Remember that only those who have received over $20,000 in gross payments across more than 200 incoming transactions will receive a 1099-K. If you don’t meet the minimum payment threshold and/or transaction count, you will not receive any type of 1099 form. For example:

  • Took in $25,000 as 25 payments of $1,000 each? No 1099-K would be sent.
  • Took in $2,500 as 250 payments of $10 each? No 1099-K would be sent.
  • Took in $25,000 as 250 payments of $100 each? U.S. persons would receive a 1099-K.

A 1099-K is a record of payments, not earnings. In accounting terms, this is a “gross” total rather than “net.” As such, it includes all payments to the freelancer on all contracts. This includes funds you may have then paid to Upwork as fees or to your clients as refunds rather than withdrawing. For example:

  • Received $25,000, but refunded $500, $6,000, or even all $25,000? It doesn’t matter. We have to use the total before fees and refunds.
  • If you received $100 from a new client for a contract, the full $100 would count towards the 1099-K total (not the $90 in earnings left after you paid $10 to Upwork in service fees). That means if you had $100 contracts with 250 different clients, you’d have $25,000 in payments on your 1099-K.

Tip: The membership and service fees you pay to Upwork may be tax-deductible business expenses and refunds may not be considered “earnings” for tax purposes. Because the 1099-K is a record of payments only, what you report as income/earnings to the IRS may differ from the amount on this form.

 

This article does not address all the tax issues for freelancers and it cannot and should not be relied upon as legal or tax advice.  Readers are strongly encouraged to seek tax advice based on their particular circumstances from an independent tax advisor.


Have more questions? Submit a request

Comments

Incident Status
Components
Locations

Select your issue category and subcategory
Please share as much information as you can, including things like:
Attachment (for example, screenshots):
Add Files
    Popular Topics
    Provide more details:
    Attachment (for example, screenshots):
    Add Files
      • Discuss with Upwork Community

      Your request has been submitted

      Your ticket number is XXXXXXXXX
      We will email you as soon as we can.

      Our records show your Upwork account is not active.

      This might be due to no account activity (earnings, payments, contracts, etc.) or because we had to suspend it. When we suspend an account we send an email explaining the reason and whether or not you can take steps to reverse the suspension. Please review that email for more details.

      For general questions, you can visit our Community or review our Terms of Service.

      We’ll start a video chat with you. Please make sure you use a desktop device with a camera to continue the process. Also, allow Upwork temporary use of your camera and microphone. You may disable this access after the chat session.

      If all of our agents are busy when you attempt to chat, please hold, and one of our agents will be with you shortly.

      We noticed that you're currently using a browser that is not supported by our video verify process.

      We recommend that you switch to Google Chrome or Firefox in order to successfully complete verification. Thank you

      Upwork’s Category Specialists are standing by to help you discover and plan new projects.

      Ask them about roles or projects that you want to learn more about. They can also draft job posts for you.

      Your chat will begin in the bottom right corner of this page.

      Upwork’s Category Specialists are currently offline.

      Send us a message below and we’ll respond via email as soon as we can. You can also come back here during business hours (Mon-Fri, 6am-5pm PT) to chat with us.

      How can we help?
      Thanks for your message! A Category Specialist will respond to your message via email as soon as they can.