Tax & Accounting

What to know about taxes and Open Source Collective

For Payees/Expense Submitters

Tax Forms Required

• If your invoiced payments from OSC total $600 USD or more per year, you must submit:

  • For U.S. payees — W-9 form

  • For non-U.S. payees — W-8BEN/E form

• When your invoices exceed $600, OSC will send you an email from Dropbox Forms with a secure link to complete your tax form:

  • "Open Collective sent you a request via Dropbox Forms."

• Your expense will not be paid until your tax form is submitted.

Reporting income from OSC

• U.S. payees —

  • If you earn over $600 in a year, OSC will issue you a 1099 form for tax reporting.

  • If you earn less than $600, you won't receive a 1099 but you still need to report it as miscellaneous self-employment income when filing your taxes

    • Here is a good explanation of how W9s work for independent contractors, and there's more info on what a 1099 is here.

• Non-U.S. payees —

  • OSC will not issue a tax form.

  • However, we are required to collect your tax form for accounting purposes to confirm that the payment was made to a non-U.S. citizen. This helps us accurately report payments and differentiate between U.S. and non-U.S. payees.

  • You are responsible for complying with your country's tax regulations and obligations.

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For Financial Contributors/Donors

• Contributions to hosted member projects hosted by OSC are not tax- deductible.

  • OSC is a 501(c)(6) nonprofit and not a 501(c)(3) charitable or public-benefit nonprofit.

    • The IRS does not automatically classify open source projects as charitable just because they have an open source license. To qualify as a charity, an organization must serve a specific charitable group or purpose, and open source, by itself, does not meet that requirement.

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For Project Admins

Tax Handling

• OSC manages tax requirements for your project for the funds that we hold. This includes:

  • Collecting the required tax forms (W-8 or W-9) from financial contributors and payees

  • Filing taxes

  • Issuing 1099s, as required

As a fiscally hosted project, you do not need to register or file anything for tax purposes related to your project for the funds that we hold. One of the core benefits of being fiscally hosted by OSC is that we handle tax compliance on behalf of the project that are raised through us.

The exception would be personal taxes.

As shared above, individuals who receive income from Open Source Collective (or one of its hosted projects) will be asked to submit a W9 or W8 (depending on what country you are in) and will be issued a 1099. If this applies to you, you will automatically be sent a notification. We take care of filing these with the IRS at the end of the year along with the total amount of money that individual was paid throughout the year. The individual will receive a notice from the IRS for any taxes due to the US because this is where OSC is based as a business.

If you have questions about your own personal tax situation, we recommend reaching out to a tax professional.

Accepting Grants:

• As a fiscally hosted project under OSC, you can accept grants.

• Some grants are limited to 501(c)(3) organizations. Before applying, confirm that the grant allows funding to a 501(c)(6) nonprofit.

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👉 For more information on taxes and the Open Collective platform, please see their documentation here.