At PIP Traders Funding LLC, traders who pass the evaluation process are welcomed into the Certified PIP Traders Program as independent contractors. This program ensures recognition of trading skills while adhering to tax regulations.
Independent Contractor Status
When you join the Certified PIP Traders Program, you become an independent contractor. This status allows you to trade and earn based on your performance while maintaining an independent relationship with PIP Traders Funding LLC.
Tax Documentation Requirements
To ensure compliance with tax regulations, traders from the United States and Puerto Rico must provide the following documents:
For US Residents:
W-9 Form (Request for Taxpayer Identification Number and Certification).
For Puerto Rico Residents:
W-9-PR Form (Puerto Rico version of the W-9).
A Merchant Certificate (for companies) or a Compliance Certificate (for natural persons without a Merchant Certificate).
If the trader has a Tax Withholding Exemption Certificate, it must be presented to PIP Traders Funding LLC to apply the exemption.
Tax Withholdings for Puerto Rico Residents
For Puerto Rico residents, PIP Traders Funding LLC applies the following withholding rates:
10% Tax Withholding:
For traders who provide a Merchant Certificate or a Compliance Certificate.
20% Tax Withholding:
For traders who fail to provide a Merchant Certificate or Compliance Certificate.
Exemptions:
If a trader possesses a valid Tax Withholding Exemption Certificate, it must be submitted to PIP Traders Funding LLC to apply the exemption.
Note: Tax withholding will be applied to the total payment after the profit split is applied.
Tax Withholdings for US Residents
For US residents, PIP Traders Funding LLC does not withhold taxes if a valid W-9 form is submitted. However, it is the trader’s responsibility to report and pay applicable federal, state, and local taxes on the income reported in Form 1099-NEC.
Purpose of Tax Documents
At the end of the fiscal year, PIP Traders Funding LLC will issue the following tax documents:
Form 1099-NEC: For United States residents to report nonemployee compensation.
Form 480.6C: For Puerto Rico residents to report payments made to independent contractors.
Note for International Traders
Traders residing outside of the United States and Puerto Rico are not required to submit W-9 or W-9-PR forms, and tax withholdings will depend on their local tax laws or applicable treaties.
Transparency and Compliance
PIP Traders Funding LLC is committed to ensuring transparency and compliance with tax laws. If you have questions about documentation, withholding rates, or exemptions, feel free to contact our support team. We’re here to help!