Hi Atlanta Tax Expert,

I had a question regarding my tax liability (I am on H1B status in USA) for accepting referrals from a company. I would appreciate your answers. I have from time to time come to this forum seeking your advice and would thank you for raising my awareness.

I had introduced an employee to a company and they are giving me a referral for that. I was expecting a check of some sort but they recently sent me some paperwork to sign
1) Network partnership agreement stating they are entering into an agreement with me (an individual) as a partner etc..
2) They gave me a W-9 form and this is what got me thinking about my tax liabilities and also if I am supposed to accept any referrrals of this sort being on H1B status. They will mail me payments . Do you think I will get a 1099 at the year end to file taxes?

Let me know what your thoughts are and If a person on H1B can get such payments? (I am guessing its ok because I get 1099-INT, DIVs from my stock broker and banks).

Appreciate your answers.

Thank you!

You will probably get a Form 1099-MISC with the amount entered in Block #3 (Other Income). If so, you will report that income on Line #21 as "Other Income" and pay federal and state income taxes on the income. However, you should be exempt from any self-employment taxes.

If the Form 1099-MISC has the income listed in Box #7 (non-employee compensation), then you will need to file Schedule C and probably Schedule SE to calculate and pay self-employment taxes.

You will probably get a Form 1099-MISC with the amount entered in Block #3 (Other Income). If so, you will report that income on Line #21 as "Other Income" and pay federal and state income taxes on the income. However, you should be exempt from any self-employment taxes.

If the Form 1099-MISC has the income listed in Box #7 (non-employee compensation), then you will need to file Schedule C and probably Schedule SE to calculate and pay self-employment taxes.

Thank you for your repsonse ATE.
Another follow-up I have on the above reply.
If the income is reported in Box 7, and I have to pay self-employment taxes, is it legal for a H1B individual to do this as H1Bs cannot be self-employed. Please explain how it works if you are on H1B status.

This is NOT true self-employment income; it is referral income, which IS legal for H-1B visa holders.

If you discuss this with the company paying your the referral bonus to MAKE SURE they put the amount in Block #3 of the Form 1099-MISC, you will avoid the self-employment tax issue.

This is NOT true self-employment income; it is referral income, which IS legal for H-1B visa holders.

If you discuss this with the company paying your the referral bonus to MAKE SURE they put the amount in Block #3 of the Form 1099-MISC, you will avoid the self-employment tax issue.

Thank You. I will certainly talk to them about doing it that way.
Appreciate your input on this.

Glad to help!