We know taxes can be difficult, especially figuring out which forms you need. While we can’t provide you with legal or tax advice, we can clarify which documents you will receive from us.
If you're a freelancer whom the Internal Revenue Service (IRS) defines as a “U.S. Person” and you earn money working through Upwork, you need to report this income on your tax return even if you do not get any forms from us. However, we will send you a 1099-K if you earn $20,000 or more in payments from your clients on Upwork in the calendar year and have at least 200 transactions.
NOTE
This article applies specifically to U.S. persons. If you are not a U.S. person, you will need to complete and submit Form W-8BEN or Form W-8BEN-E to Upwork, and you are also responsible for complying with the tax laws in your own jurisdiction. For questions about what taxes you owe, you may wish to consult with a trusted tax expert or advisor — Upwork cannot provide tax advice.
Form 1099-MISC and Form 1099-NEC
Starting in tax year 2020, non-employee compensation should be reported on Form 1099-NEC instead of Form 1099-MISC. Freelancers — including those who earned $20,000 or more — will not receive a Form 1099-NEC or 1099-MISC from Upwork. Your clients are not required to send you a 1099-NEC or 1099-MISC, either.
Form 1099-K
Form 1099-K is used to report payments made to U.S. taxpayers to the IRS. If we’re required to send a Form 1099-K to the IRS for you, you will also receive a copy, which may help you document your yearly income as you prepare your taxes or complete other business.
How we send your Form 1099-K and when you’ll receive it
You can choose to receive your copy of Form 1099-K electronically or by mail. Choosing electronic delivery lets you download your Form 1099-K in your account's Tax Forms. You can choose digital receipt when you complete your Form W-9 or at any time in Tax Preferences > Notification Settings.
We’ll make your digital Form 1099-K available for download by January 31, and we’ll notify you by email when it’s ready. If you choose mail delivery, we’ll mail it via the U.S. Postal Service postmarked by January 31.
If you are a U.S. taxpayer and are not receiving a Form 1099-K, you’ll see “There is no 1099-K for this year” in the 1099-K section of your account's Tax Forms by January 31.
Qualifying freelancers and payments
Freelancers and businesses who are U.S. taxpayers and receive at least $20,000 in gross payments during the calendar year with 200 transactions or more will receive a Form 1099-K. Under Internal Revenue Code Section 6050W, Upwork will file a Form 1099-K with the IRS for you, and you will receive a copy.
- Only those who received at least $20,000 in gross payments and had at least 200 transactions on Upwork during the calendar year will receive a Form 1099-K
- Transactions only include payments. Fees, taxes, withdrawals and refunds do not count as eligible transactions
- The minimum $20,000 is a total of all your payments on Upwork, not per contract. For example, If you work on 200 contracts and get paid $100 for each, you will qualify to receive a Form 1099-K
- If you do not meet the minimum payment threshold, you will not receive any type of Form 1099 from us, but you are still required to report your income
A 1099-K is a record of all payments made to you within the calendar year, not only what you withdraw. In accounting terms, this is a “gross” total rather than “net.” It includes all payments to you on all contracts. We cannot deduct money you refunded, paid in fees, or used to purchase services from the total that we report on your Form 1099-K. For example:
- Your client paid you $25,000, but you refunded $5000. We still have to report the total $25,000 total to the IRS, not just the $20,000 that you kept
- Your client paid you $100 for a contract and you paid 10% ($10) in fees to Upwork. The full $100 counts toward the 1099-K total, not the $90 in earnings that you could withdraw
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 Form 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.
- For total payments received, use the Transaction History report filtered by credits
- For total billings (including fees, but subtracting refunds), use the Billings and Earnings report
W-2 Exceptions
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.
Learn more about U.S. taxes for income earned on Upwork from our tax partner, Keeper Tax.
Frequently Asked Questions
The IRS is still requiring us to collect this information from our freelancers and validate the numbers, even when we are not sending you a Form 1099-K.
Any U.S. taxpayer who received combined payments of at least $20,000 through the Upwork platform that included at least 200 transactions will receive a Form 1099-K from Upwork.
You’ll need to make sure that your tax address is up to date and that you have completed a Form W-9 with a valid Tax Identification Number (SSN, EIN, or ITIN). You can update this information in Settings › Tax Information.
Once we generate your Form 1099-K, you can download it in Settings > Tax Forms if you choose digital delivery. You can choose digital delivery when you complete your W-9 or at any time in the Tax Preferences section of your Notification Settings.
Ensuring we have the correct tax residence address and tax ID on file allows us to correctly file your 1099 forms as required by the IRS, as well as send it to your correct address this upcoming tax filing season.
Plus, we are required to withhold taxes and submit them to the IRS at a pre-set tax rate if you do not provide us with a valid Tax Identification Number (SSN, EIN, or ITIN) on your W-9.
If we are required to send one, you'll get your 1099-K form by January 31 each year for the previous year’s payments, either electronically, if you consent to digital delivery, or by mail. For example, you will receive your 2023 1099-K in by early February of 2024.
We will make the Form 1099-K available for download on our platform to all applicable freelancers by January 31, 2024.
- To be able to download it your Form 1099-K on our platform, choose digital delivery when you complete your W-9 or in the Tax Preferences section of your Notification Settings
- If you do not choose digital delivery, we’ll mail a copy of your Form 1099-K by January 31. When you receive it will vary depending on mail delivery. You can choose digital delivery in your Tax Preferences to view your Form 1099-K on our platform even after we mail it.
Note:
If you want your Form 1099-K mailed, please ensure that your address is current and that it is a valid street address, not a P.O. Box. To update your address, go to the Tax residence section of your account's Tax Information.
Yes, you can download a copy of your Form 1099-K from your account's Tax Forms if you choose digital delivery for your tax forms. You can choose digital delivery at any time by going to Settings › Notification Settings › Tax Preferences.
All income that you make on Upwork may be taxable and should be reported. Please consult with your tax advisor about what earnings and expenses you should claim on your taxes.
The U.S. Internal Revenue Service requires Upwork to report all gross payments to freelancers on Form 1099-K. We cannot deduct the fees that you pay from what we report. Please consult your tax advisor about what earnings and expenses you should claim on your taxes.
The U.S. Internal Revenue Service requires Upwork to report all gross payments to freelancers on Form 1099-K. We cannot deduct refunds that you pay to clients from the total that we report. Please consult your tax advisor about what earnings and expenses you should claim on your taxes.
You will receive a Form 1099-K if you are a U.S. person and receive at least $20,000 in payments from your clients on Upwork in 2023 that included 200 or more transactions.
Eligible transactions only include payments. Fees, taxes, withdrawals, and refunds do not count as eligible transactions. The following are considered transactions:
- Hourly invoices
- Fixed-price invoices
- Bonuses
- Expense reimbursements
To check the number of eligible transactions in a year:
- Go to Reports > Transaction History
- Set your Statement Period as January 1 - December 31 of the relevant year and select Go
- Choose Download CSV
- You can sort by the Type column in the sheet to view the number of eligible transactions
Yes, you can easily update your preference for receiving your 1099-K electronically. To consent to digital receipt, follow these steps:
- Go to Settings > Notification Settings.
- Under Tax Preferences, check the box beside “I want to receive tax documents digitally (including Form 1099-K)”.
- An electronic consent form will appear. Select "I agree" to receive digital tax forms, including your Form 1099-K.
Yes. You can access your information more quickly and easily. You won’t have to wait for it to come in the mail, and you’ll have it available at your fingertips on our secure platform whenever you need it for seven years. Digital tax records also help reduce paper clutter and are environmentally friendly, saving trees and the energy needed for printing and delivering paper copies.
We will keep your digital forms on file for a minimum of seven years.
Please consult a tax advisor to determine your responsibilities for freelancers who do work for your agency. If you pay your freelancers through Upwork by setting up sub-contracts for the work they do for your agency, you will not have to send a Form 1099-K since they will receive one from Upwork. However, if you pay them off the Upwork platform, you might be responsible for reporting their income.
