What Twitch Affiliates Need to Know About Tax Forms

Earning money as a Twitch Affiliate comes with tax responsibilities that many new streamers may not anticipate. Since Twitch income isn’t subject to automatic tax withholdings, affiliates must understand the necessary forms and how to report their earnings correctly to avoid unexpected tax bills or penalties.

Income Classification for Affiliates

Money earned through Twitch’s Affiliate Program is considered self-employment income by the IRS and most tax authorities. Unlike traditional employment, where taxes are withheld automatically, affiliates must calculate and pay their own taxes. Twitch earnings are subject to both income tax and self-employment tax, which covers Social Security and Medicare contributions. In the U.S., the self-employment tax rate is 15.3% as of 2024, applied to net earnings above $400.

Twitch revenue comes from multiple sources, including ad revenue, subscriptions, and Bits. Since Twitch does not withhold taxes, affiliates should set aside a percentage of their income to cover tax obligations.

As independent contractors, affiliates can deduct business-related expenses to lower taxable income. Common deductions include streaming equipment, internet costs, and software subscriptions. These expenses must be ordinary and necessary for streaming, and keeping detailed records is essential in case of an audit.

Forms You Might Be Required to Fill Out

Twitch affiliates may need to complete specific tax forms depending on their location and earnings. These documents help tax authorities track income and ensure proper reporting.

W-9 for US-Based Affiliates

U.S. Twitch affiliates must submit a Form W-9 to Twitch (or its payment processor) to provide their taxpayer identification number (TIN), typically a Social Security Number (SSN) or Employer Identification Number (EIN). This form certifies U.S. tax status and prevents Twitch from withholding taxes on payments.

The W-9 allows Twitch to issue a Form 1099-NEC if an affiliate earns at least $600 in a calendar year. If the W-9 is not submitted, Twitch may be required to withhold 24% of payments under backup withholding rules. Affiliates should ensure the accuracy of their W-9 to avoid tax reporting issues.

1099 Issued by Platforms

Twitch issues a Form 1099-NEC to U.S. affiliates who earn $600 or more in a year. This form reports non-employee compensation, including income from subscriptions, Bits, and ad revenue. The IRS also receives a copy, meaning affiliates must report this income on their tax return.

Affiliates who receive payments through third-party processors like PayPal or Stripe may instead receive a Form 1099-K if their total transactions exceed $20,000 and 200 transactions in a year. Some states, such as Massachusetts and Vermont, require a 1099-K for earnings over $600.

Even if an affiliate does not receive a 1099, they must still report all income. The IRS can track unreported earnings through Twitch’s financial records, and failure to report income can result in penalties and interest charges.

W-8 Forms for Non-US Affiliates

Affiliates outside the U.S. must complete a Form W-8BEN (for individuals) or W-8BEN-E (for businesses) to certify foreign status and claim any applicable tax treaty benefits. Without this form, Twitch may withhold 30% of earnings for U.S. tax purposes.

Many countries have tax treaties with the U.S. that reduce or eliminate this withholding. For example, affiliates in the United Kingdom can claim a 0% withholding rate on certain types of income by providing their UK taxpayer identification number on the W-8BEN. Affiliates should check the IRS tax treaty table to determine their country’s withholding rate.

The W-8BEN must be updated every three years or when an affiliate’s tax status changes. Incorrect or missing forms can lead to unnecessary tax withholdings, requiring a U.S. tax return to request a refund.

Reporting Subscription Revenue and Tips

Twitch affiliates earn money from subscriptions and tips, but how these are reported for tax purposes depends on how they are received. Subscription revenue comes directly from Twitch and is considered business income. Twitch provides affiliates with a revenue dashboard that tracks subscription earnings, which should be used for accurate reporting.

Tips, often referred to as “donations” by streamers, are handled differently depending on the platform used. If tips are processed through Twitch’s Bits system, they are included in the platform’s payout reports and taxed the same way as subscriptions. However, if received through third-party services like PayPal, Venmo, or Cash App, they are considered direct payments and may not always be reported by the payment processor.

Under current IRS regulations, third-party payment platforms must issue a Form 1099-K if an individual receives over $20,000 in transactions and has more than 200 payments, though some states impose lower thresholds. Regardless of whether a 1099-K is issued, all tip income must still be reported.

A common misconception is that calling tips “donations” exempts them from taxes. Unlike registered charities, Twitch streamers are not tax-exempt organizations, so any money received is taxable income. Some streamers have underreported their earnings due to this misunderstanding, which can lead to penalties and interest if discovered during an audit. The safest approach is to track all tips and include them in total income when filing taxes.

Miscellaneous Earnings From Sponsorships

Sponsorship deals provide an additional revenue stream for Twitch affiliates, but the tax treatment of these earnings depends on how compensation is structured. Payments from sponsorships can take several forms, including direct cash payments, free products, or performance-based commissions. Each must be accounted for correctly to ensure accurate tax reporting.

Monetary payments from sponsorship agreements are treated as self-employment income and are subject to income and self-employment taxes. If a company pays an affiliate more than $600 in a year, they may issue a Form 1099-NEC, but affiliates are responsible for reporting all earnings regardless of whether a tax form is received. Some companies may process payments through third-party platforms, potentially triggering a Form 1099-K if the payment processor threshold is met.

Non-cash compensation, such as free gaming peripherals, software licenses, or apparel, must also be reported as income. The fair market value of these items must be determined and included in gross income. If a company sends a product in exchange for a promotional obligation, it is considered taxable compensation rather than a gift. Affiliates should maintain records of these items, including correspondence or contracts that outline their value.

Proper Record-Keeping of Earnings and Expenses

Maintaining accurate financial records is necessary for Twitch affiliates to track income, claim deductions, and prepare for tax filings. Since streaming involves multiple revenue streams and potential business expenses, keeping organized documentation helps avoid errors and ensures compliance with tax regulations. Poor record-keeping can lead to missed deductions or underreported income.

A structured approach to tracking earnings includes maintaining copies of all 1099 forms, payment processor statements, and Twitch payout reports. Affiliates should also document income received through third-party platforms, such as sponsorship payments or direct tips, even if they do not receive a tax form. Using accounting software like QuickBooks or Wave can simplify this process by categorizing transactions and generating financial reports. For expenses, keeping receipts and invoices for purchases related to streaming—such as equipment, software, and internet costs—helps substantiate deductions. The IRS requires records to be retained for at least three years, though longer retention may be necessary if fraud or substantial underreporting is suspected.