# W-9 Compliance Explained for Advocate

#### What is W-9 compliance in Advocate?

W-9 Compliance is an **optional feature in Advocate** that helps your brand meet US tax reporting requirements for participants who **earn $2,000 USD or more in non-cash rewards** (e.g., gift cards, products with USD value, etc.) in a calendar year.

{% hint style="success" %}
**Note**: This is separate from the tax handling process used for [cash rewards](https://help.impact.com/brand/what-would-you-like-to-learn-about/advocate-program/advocate-rewards/pay-with-cash/cash-payouts-for-advocate-explained) paid out through impact.com. Cash rewards require participants to submit tax forms and banking details directly via a secure tax interview flow built into your widget or microsite before earning rewards. W-9 Compliance, on the other hand, supports brands that issue non-cash rewards and want to track W-9 status for IRS compliance manually.
{% endhint %}

**What W-9 compliance does**

* Track W-9 collection status for each participant within their profile.
  * See [how to change participant's W-9 tax compliance status](https://help.impact.com/brand/what-would-you-like-to-learn-about/advocate-program/manage-advocate-participants/w-9-tax-compliance/manage-w-9-tax-compliance-for-participants-in-advocate) for more information.
* Assign a taxable USD value to non-cash rewards (like gift cards or physical products) for compliance tracking.
* Automatically place rewards into a pending state when a participant without a W-9 on file exceeds $2,000 USD in a tax year.

**What W-9 compliance does not do**

* Advocate does not collect W-9 forms on your behalf when rewarding non-cash rewards.
* Advocate does not store copies of W-9 forms.
* This feature does not apply retroactively—rewards earned before enabling W-9 Compliance will not count toward the $2,000 USD threshold.

Your team is responsible for collecting and securely storing W-9 forms and issuing 1099-NEC forms if applicable.

#### How to enable W-9 compliance

To turn on W-9 Compliance for your account, reach out to our [support team](mailto:saasquatch-support@impact.com) and let us know which option you want from the list below.

<details>

<summary>Option 1: All participants</summary>

W-9 Compliance applies to all participants, regardless of country.

* Any participant who's W-9 form has been *Marked as not collected* will be limited to $2,000 USD in total rewards per tax year.
* Rewards that exceed this threshold are placed in a pending state until the W-9 form is *Marked as collected*.

</details>

<details>

<summary>Option 2: Participants with an explicit US country code</summary>

W-9 Compliance applies only to participants with a US country code in their profile.

* These participants are subject to the same $2,000 USD limit unless a W-9 is *Marked as collected*.
* Excess rewards are held in a pending state until compliance is met.

<div data-with-frame="true"><figure><img src="https://4048883401-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FwMLlMoFBtKJa8ptd3zaw%2Fuploads%2Fgit-blob-403b1ce5d527d6691bae3a289540601ac24e4900%2F1539dbbf904fca5288891961d8c292f8b1b31ae99f1e5e94151968bf192aa033.jpg?alt=media" alt="" width="312"><figcaption></figcaption></figure></div>

</details>

<details>

<summary>Option 3: Participants with an explicit or implicit US country code</summary>

W-9 Compliance applies to participants who have either:

* A US country code.
* A locale ending in `_US` on their participant profile.
* As with the other options, rewards over $2,000 USD are held in a pending state until the W-9 is *Marked as collected*.

<div data-with-frame="true"><figure><img src="https://4048883401-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FwMLlMoFBtKJa8ptd3zaw%2Fuploads%2Fgit-blob-403b1ce5d527d6691bae3a289540601ac24e4900%2F1539dbbf904fca5288891961d8c292f8b1b31ae99f1e5e94151968bf192aa033.jpg?alt=media" alt="" width="312"><figcaption></figcaption></figure></div>

</details>

#### Participant notification

{% tabs %}
{% tab title="In-app status update" %}
The participant will see an immediate change in their reward table. The reward that triggers the threshold, and any subsequent rewards, will be placed in a *Pending* state.

* **Visual Indicator:** A note will appear directly underneath the reward stating that a W-9 is required.
* **Resolution:** The reward remains *Pending* until a program manager manually marks the form as received.
  {% endtab %}

{% tab title="Email notification" %}
Regardless of which option you choose, **participants who exceed $2,000 USD in non-cash rewards** will automatically receive an email notification that a tax form is required.

This email can be customized to include:

* Your preferred language or tone.
* Specific instructions on how participants should submit their W-9 form to your team.
* A point of contact or support information, if needed.

Customizing this message ensures your participants clearly understand the next steps and helps streamline your tax form collection process.
{% endtab %}
{% endtabs %}

#### Best practice reminder

We recommend speaking with your legal or finance team to determine whether W-9 collection is required for your referral program, or if it’s already being handled through other systems.

W-9 Compliance is especially useful for brands that do not use cash payouts through impact.com and want a lightweight way to monitor tax eligibility for non-cash rewards. However, you remain responsible for collecting, securing, and reporting tax information in accordance with IRS guidelines.

#### Learn more

* [Check a Participant's W-9 Tax Compliance Status](https://help.impact.com/brand/what-would-you-like-to-learn-about/advocate-program/manage-advocate-participants/w-9-tax-compliance/manage-w-9-tax-compliance-for-participants-in-advocate)
* [Change a Participant's W-9 Tax Compliance Status](https://help.impact.com/brand/what-would-you-like-to-learn-about/manage-advocate-participants/w-9-tax-compliance/manage-w-9-tax-compliance-for-participants-in-advocate#update-an-individual-participant-s-w-9-status-0-2)