Why you don’t file tax forms for freelancers on Upwork

In this article

• Do I need to file tax forms for the freelancers or agencies I work with on Upwork?
• Why don’t I have to send any tax forms for freelancers (1099-MISC, 1099-NEC, 1099-K)?
• What about freelancers outside the U.S.?
• What if I classify the freelancer as an employee?

Do I need to file tax forms for the freelancers or agencies I work with on Upwork?

No. One benefit of paying your freelancers through Upwork is that you don't have to file tax forms like the W-2, 1099-MISC, or 1099-NEC for freelancers and agencies.

Why don’t I have to send any tax forms for U.S. freelancers (1099-MISC, 1099-NEC, 1099-K)?

Under the Internal Revenue Code Section 6050W, you don’t need to file tax forms for freelancers paid through Upwork because you’re not paying your freelancer directly.

When you pay your freelancer on Upwork, you are actually paying our licensed escrow subsidiary, which acts as a third-party settlement organization. This means we (not you) are the direct payor and required to report the payments we remit to your freelancer to the Internal Revenue Service (IRS) on Form 1099-K, which applies to freelancers who are U.S. Persons.

Even if a freelancer doesn’t receive a 1099-K from Upwork (because their earnings were below the IRS threshold), you still don’t need to file a 1099-MISC or 1099-NEC.

What about freelancers outside the U.S.?

Upwork also handles any required international reporting, such as DAC7 for EU-based freelancers.

Freelancers submit the appropriate tax forms (like Form W-9 for U.S. persons or W-8BEN/W-8BEN-E for non-U.S. persons) directly to Upwork. From there, Upwork manages any tax reporting obligations.

What if I classify the freelancer as an employee?

If you believe that your Upwork freelancer may be best classified as an employee based on the factors of your work relationship, or if you need help determining the proper classification, you should use Upwork Payroll.

When you use the Upwork Payroll service, our staffing provider will:

• Employ the freelancer and assign them to provide services to you
• Handle all of the withholding and payment of taxes
• Provide the worker with a Form W-2

You should determine proper classification of all of your U.S.-based freelancers based on IRS guidelines and other federal, state, and local regulations.