If you have US citizenship, you must fill out a W9. This is true even if you do not currently live in the US. Additionally, if you are a resident alien of the US, you must fill out a W9 regardless of your citizenship.
If you do not have US citizenship and are living outside of the US, you must fill out a W-8 BEN.
All traders are considered independent contractors, not employees.
Funded traders should report all earnings as regular income. Additionally, funded traders are only required to report the amount they have received as payouts.
For example, a funded trader that earns $5,000 in their account but only requests a $1,000 payout, then they would have to report $1,000 worth of income.
Traders can only set up a Funded Account® under a US-based single-person LLC. Topstep® cannot set up a Funded Account® under a C-corp, S-corp, or multiple-member LLC. If a trader wishes to set up a Funded Account® using an eligible business, they still must use their personal information on the Funded Account® Agreement. They can then enter their business information on the tax form. Traders that choose to go this route can take their payouts through the business.
Traders that receive over $600 worth of payouts in a calendar year and have US citizenship will receive a 1099-NEC. during the following year. The amount of funds the trader received will be recorded on the 1099-NEC form as nonemployee compensation. We do not have to provide a 1099 form to anyone making less than $600 during a calendar year.
Traders without US citizenship will not receive a 1099 form from Topstep®. The 1099-NEC is only applicable for US/IRS reporting purposes and not for foreign reporting purposes. Topstep® is not obligated to provide any documents for reporting taxes to foreign governments.
Topstep® is unable to provide guidance regarding foreign tax reporting. We advise traders to report any earnings in accordance with their country’s local tax laws. We would also recommend that traders consult a tax or legal professional if they have any specific questions regarding their country’s tax standards.