Chalk Couture™ does not withhold any income taxes for Designers. Instead, Designers will receive a non-employee compensation form to use when filing income taxes.
US Designers who receive $600USD or more in commissions paid, bonuses, Designer Dollars (DD), product, events, and other rewards will receive a 1099-NEC.
US Designers who made purchases during the previous calendar year in excess of $5,000USD, will receive a 1099-MISC form.
Canadian Designers who receive $500CAD or more in commissions, bonuses, Designer Dollars, products, events, and other rewards, or have made purchases during the previous calendar year in excess of $5,000CAD, will receive a T4A.
Do I need to get a Tax ID number?
Some Designers choose to create a separate business account while others do not (and choose to do business using their Social Security Number (SSN) or Social Insurance Number (SIN) for tax documentation). Please check with your tax professional for more advice.
What is a 1099-NEC or T4A?
A 1099-NEC and T4A is the form that shows the amount of reportable earnings that you received in a calendar year when you are an independent contractor, not an employee. All Designers are considered independent contractors.
What is a 1099-MISC?
A 1099-MISC is the form that shows that Chalk Couture has sold $5,000 or more in product to the Designer.
What are reportable earnings?
These include any value of payments that Chalk Couture makes to you. This can be in the form of cash (e.g., commission payments, bonuses, DD redeemed), product, or trips. It also includes prizes or awards.
Are the commissions I receive upfront reported to the IRS or Canada Revenue Agency?
No. Designer-priced purchases are not automatically reported to the tax agencies. Orders totalling $5,000 or more in a calendar year generate a 1099-MISC or T4A, which is reported to the IRS or Canada Revenue Agency. However, all earnings you make, including instant commissions from products you have purchased at the Designer price, are taxable
under income tax regulations. Please consult your tax advisor for your personal income tax requirements.
I earned less than $600USD. Will I still receive a 1099-NEC?
No, these documents are only sent out to US Designers who earn $600 or more in commission, incentives, promotions, gifts, awards, and trips as outlined above. Note that even though you may not receive a 1099, you are still responsible for taxes on any income you earn.
I earned less than $500CAD. Will I still receive a T4A?
No, these documents are only sent out to Canadian Designers who earn $500 or more in commission, incentives, promotions, gifts, awards, and trips as outlined above. Note that even though you may not receive a T4A, you are still responsible for taxes on any income you earn.
If I have not earned enough to receive a form, do I have to report the amount I did receive on my tax return?
Yes, both the IRS and Canada Revenue Agency requires everyone to report any income received from any source, regardless of whether you received a form from the person or company that paid you, and regardless of whether you were paid in money, product, or services.
What information is included in a 1099-NEC and T4A?
The form includes the amount of non-employee compensation provided to you, and includes commissions paid and any prizes and awards you received.
What is non-employee compensation?
Anything of value (e.g., money, merchandise, or services) you received during the calendar year as compensation for services performed. It is money for which income taxes were not withheld.
When will I receive my 1099 form(s)?
The IRS requires that 1099s be mailed by the last day of January.
When will I receive my T4A form?
The Canada Revenue Agency requires that T4As be mailed by the last day of February.
Who do I contact for questions concerning taxes?
For questions specifically about your forms, please contact us at Designer Services. For all other tax questions, please contact a tax professional.
How do I get paid?
Make sure to fill out the Chalk Pay tab in the Designer Office. It takes 10 business days for your banking information to be verified.
When do I get paid?
When an order is placed on your Chalk Site, you’ll earn a 25% commission that is paid the following month on the 15th. Any Team sales earned or bonuses are also paid the following month on the 15th.