We require the full name and address of all developers that we pay so that we can determine whether U.S. Tax laws apply. For U.S. Citizens and permanent residents, we are required to collect some additional information, including tax status and social security number, equivalent to filling out a W-9 form.
For most developers, we don't do anything with the information. However, if you are a US developer who earns more than $10 in a calendar year we will send out a 1099 with your earnings to you and the IRS no later than January 30th of the next calendar year.
More about withholding: Ad and kred revenue share income generated on Kongregate by non-U.S. persons and non-resident aliens is subject to taxation under U.S. law as royalty income. This is due to the fact that our servers are based in the U.S. so the revenue is considered to be U.S. income. U.S. developers do not have withholding but may have to pay taxes after the fact.
For non-U.S. persons, the withholding differs from country to country based on tax treaty. By default, we are required to withhold 30%. A reduced withholding tax rate may be available based on the tax treaty with the U.S. if tax treaty benefits are claimed through a valid and timely filed W-8 form. A valid W-8 form must be on file with Kongregate before payments may be processed to you. You can view a list of the countries with which the U.S. has standing tax treaties, as well as the full text of those treaties, here.
Contest winnings are also subject to withholding as "Other Income", also depending on current treaties and tax law.
If you believe that we are withholding the wrong amount or you have any other questions concerning U.S. tax withholding, you can email firstname.lastname@example.org and we’ll do our best to answer your questions. We will not be able to give you specific tax advice, however, so your best resource for figuring out how to file returns, for example, is the Internal Revenue Service (IRS).