To pay UGC creators properly, a US brand does three things: puts the rate, deliverables, usage and payment terms in a signed agreement; collects a Form W-9 from each US creator (or a Form W-8BEN or Form 8233 from a foreign individual) before the first payment; and, for US contractors paid $2,000 or more in a tax year beginning after 2025, files Form 1099-NEC and sends the creator a copy by January 31. The steps are simple. What makes them feel hard is that most brands discover the tax side in January, after a year of paying creators from three different apps.
If you have paid creators by bank transfer, payment app and card in the same quarter and are not sure what you owe the IRS, this post is for you. Below is how to pay UGC creators at home and abroad, which form applies to which creator, what changed for 2026, and a payment schedule creators actually like.
The short answer
| Creator situation | Form to collect before paying | Year-end reporting by you | Watch for |
|---|---|---|---|
| US individual or sole proprietor | Form W-9 | Form 1099-NEC if paid $2,000 or more in the year (tax years after 2025) | File and furnish by January 31 |
| US business taxed as a C or S corporation, including an LLC taxed that way | Form W-9 | Generally none: payments to corporations are generally exempt | The W-9 shows the tax classification |
| Paid by card, payment card or a third party network | Form W-9 | Not on your Form 1099-NEC: the payment settlement entity reports it on Form 1099-K | Do not report the same payment twice |
| US creator who will not give you a TIN | Ask again before paying | Backup withholding at 24% applies | Collect the W-9 before the first payment |
| Foreign individual | Form W-8BEN, or Form 8233 for treaty benefits on personal services income | Form 1042-S for payments to nonresident aliens, where it applies | Where the work is performed decides the source |
Two caveats before you screenshot that table.
First, this is a summary of IRS rules as published on November 14, 2026, not tax advice. The 1099-NEC threshold changed for tax years beginning after 2025, and the IRS says it may be adjusted for inflation from calendar year 2027. Confirm the current figures on irs.gov or with your accountant before you file.
Second, the table covers federal reporting by a US payer only. States have their own rules, and a creator's own taxes (in the US or abroad) are the creator's responsibility, not yours.
What paying UGC creators actually involves
1. The agreement comes before any money
Every payment problem we see traces back to a missing line in the agreement. Before a creator films, write down:
- The rate and what it buys: number of videos, hooks, revisions and raw footage
- The usage terms: channel, paid or organic, territory and duration
- When payment is due: on delivery, on approval, or on a fixed date after approval
- How payment is made: the method, the currency, and who covers transfer fees
- What happens if a video is not approved: a revision, a replacement or a kill fee
Our UGC creator contract template has every clause, including payment terms, written out for you to copy.
2. Collect the tax form before the first payment
The IRS describes Form W-9 as the way a payee provides their correct Taxpayer Identification Number (TIN) to the person who has to file an information return. Ask for it with the agreement, not in January. A creator who never gives you a TIN puts you in backup withholding territory: the IRS lists a rate of 24% when a payee fails to provide a correct TIN.
The W-9 also tells you the creator's tax classification. That matters because the 1099-NEC instructions say payments to a corporation, including an LLC treated as a C or S corporation, are generally exempt from reporting.
3. Know the 1099-NEC rules for 2026
The IRS instructions for Form 1099-NEC list four conditions for reporting nonemployee compensation: you paid someone who is not your employee, for services in the course of your trade or business, to an individual, partnership, estate or, in some cases, a corporation, and you paid that payee at least $2,000 during the year. The threshold increased to $2,000 for tax years beginning after 2025 and may be adjusted for inflation beginning in calendar year 2027. You file with the IRS and furnish the creator's copy by January 31.
One trap catches many brands: payments made by credit card, payment card or a third party network are reported on Form 1099-K by the payment settlement entity, not on your 1099-NEC. If you paid a creator partly by bank transfer and partly through a payment app, only the bank transfers belong on your 1099-NEC.
4. Domestic payment methods
For US creators, the choice is mostly between bank transfer and a payment app or card network:
- Bank transfer (ACH or wire): cheap, traceable, and the payments you report on Form 1099-NEC.
- Payment apps and card networks: fast for the creator, but reported by the settlement entity on Form 1099-K. The IRS's current page on understanding Form 1099-K puts the threshold for payment apps and online marketplaces at payments over $20,000 in more than 200 transactions, and notes they may send a 1099-K below those amounts.
Pick one method per creator and stick to it. Mixing methods is how one creator's payments end up split across two forms.
5. International creators
Paying a creator outside the US raises two separate questions: tax documentation and the mechanics of the transfer.
On tax, the IRS rule is that "the place, where the personal services are performed, generally determines the source of the personal service income." A creator who films entirely abroad is generally earning foreign-source income. If any of the work is performed in the US, it becomes US-source income, and the IRS's Publication 515 states that "most types of U.S. source income received by a foreign person are subject to U.S. tax of 30%," with Form 1042-S used for payments to nonresident aliens. Form W-8BEN is the certificate of foreign status a foreign individual gives "to the withholding agent or payer," and for treaty benefits on income from personal services, the IRS says the payee files Form 8233 instead. Get your accountant to confirm which applies before the first payment to a foreign creator.
On mechanics, agree in writing which currency the rate is in, who pays the transfer and conversion fees, and the date payment lands. A creator who quotes in their own currency and receives less after conversion will remember it.
Collect the tax form with the signature, not with the invoice. Every hour a brand loses to creator paperwork in January could have been saved by a W-9 collected at signing.
How to set up creator payments
A workable approach, in order:
- Send the agreement and the tax form together. W-9 for US creators, W-8BEN or Form 8233 for foreign individuals, signed before any filming.
- Choose one payment method per creator. Bank transfer if you want to report it yourself, a payment network if you accept that it will be reported on Form 1099-K.
- Pay on approval, on a fixed schedule. For example, every approved video is paid on the next weekly or biweekly payment run. Creators plan around dates, not promises.
- Keep one ledger. Creator, agreement date, tax form received, payment method, each payment and its date. That single sheet is your 1099 file in January.
- Review totals in December. Check which US creators crossed $2,000 through methods you report, and request any missing W-9 before January 31 arrives.
A concrete example. A brand pays 14 creators across 2026:
- 9 US creators paid $1,200 each by bank transfer: under $2,000, so no 1099-NEC required
- 3 US creators paid $2,600 each by bank transfer: 3 Forms 1099-NEC, filed and furnished by January 31, 2027
- 1 US creator paid $3,000 through a payment network: reported by the settlement entity on Form 1099-K where it applies, not on your 1099-NEC
- 1 creator in the UK, filming at home, paid $1,500: a W-8BEN on file, generally foreign-source income, confirmed with your accountant
- Total paid: $23,100, with exactly 3 Forms 1099-NEC to file
The same year without W-9s collected up front means chasing fourteen people for paperwork during the busiest week of January.
How to Pay UGC Creators FAQ
Do I need a W-9 from a UGC creator?
Yes, for US creators. Collect it before the first payment so you have their correct TIN and tax classification for any 1099-NEC you need to file.
What is the 1099-NEC threshold for 2026?
The IRS instructions say the threshold increased to $2,000 for tax years beginning after 2025, and may be adjusted for inflation beginning in calendar year 2027.
When is Form 1099-NEC due?
You file Form 1099-NEC with the IRS and furnish the creator's copy by January 31 of the following year.
Do I send a 1099-NEC if I paid a creator through a payment app?
No. Payments by card, payment card or a third party network are reported on Form 1099-K by the payment settlement entity, not on your Form 1099-NEC.
Do I send a 1099 to a foreign UGC creator?
Generally no. A foreign individual gives you Form W-8BEN or Form 8233, and Form 1042-S applies to payments to nonresident aliens where US-source income is involved.
What if a creator will not give me a W-9?
Without a correct TIN, the payment is subject to backup withholding, which the IRS lists at 24%. Make the W-9 a condition of the agreement.
How should I pay international UGC creators?
Agree the currency, the transfer method and who covers fees in the agreement, collect a W-8BEN or Form 8233, and pay on a fixed schedule.
How Scouty fits
When Scouty runs your program, payment is part of the work. Scouty is a creator and UGC marketing services company: our team recruits creators against your brief, puts the rate and usage terms in the brief before anyone films, briefs and reviews every video, and pays each creator on your behalf. Each creator's agreement is with you, and creators keep 100% of the rate you set. The program is measured like paid media, on conversions, CAC and ROAS.
You pay Scouty for the service, and pricing is scoped on a call, with no plans or subscriptions. Confirm the tax reporting for your program with your accountant, as you would with any payment arrangement. For how other providers handle creator payments and rights, see do UGC platforms handle payments and rights, and for what the rates themselves should be, how much UGC creators charge in 2026 and UGC pricing models.
If you would rather not run a payment ledger for thirty creators, book a call and tell us about your program.
This post summarizes federal rules for US payers as published by the IRS and read on November 14, 2026: the Instructions for Forms 1099-MISC and 1099-NEC, About Form W-9 (last reviewed June 27, 2026), About Form W-8 BEN (last reviewed October 2, 2026), Backup Withholding, Understanding Your Form 1099-K (last reviewed November 13, 2026), Source of Income: Personal Service Income (last reviewed February 6, 2026), Claiming Tax Treaty Benefits (last reviewed March 14, 2026) and Publication 515. It is not tax or legal advice, state rules are not covered, and the worked example is illustrative. Confirm your own obligations with a tax professional.
Published November 14, 2026 by The Scouty Team.