PAYMENT | What is tax withholding and when does it apply? – Developer Portal - Support

Tax withholding is when a portion of your earnings is deducted before payment and remitted to a tax authority, as required by applicable law.

Revenue share income generated on Kongregate by non-U.S. persons and non-resident aliens is subject to taxation under U.S. law as royalty income. This is due to the fact that Kongregate servers are based in the U.S. so the revenue is considered to be U.S. income.

As such, Kongregate may be required to withhold taxes from your payments and to help us get this right, we ask for you to enter tax information when you upload your first game to Kongregate. You can also update it in your Kongregate Account Settings.

Go to Settings -> Payment Info
Answer "I am a US person"
- If you answer 'Yes', the appropriate form will appear for you to complete (equivalent of US tax form W-9)
- If you answer 'No', the appropriate form will appear for you to complete (equivalent of US tax form W-8 BEN)

U.S. Citizens and permanent residents

'U.S. Persons' usually do not have withholding, but may have to pay taxes after the fact on earnings they receive from their game.

For U.S. federal tax purposes, you are considered a 'U.S. person' if you are:

An individual who is a U.S. citizen or U.S. resident alien
A partnership, corporation, company, or association created or organized in the United States or under the laws of the United States

Non U.S Citizens

For U.S. federal tax purposes, anyone who is not a 'U.S. Person' (as defined above) should have tax withholding applied on earnings they receive from their game; the withholding amount differs from country to country based on tax treaty.

By default Kongregate are required to withhold 30% of any payment due to you.
A reduced withholding tax rate may be available based on the tax treaty with the U.S. if tax treaty benefits are claimed through the tax information you provide to us (W-8 BEN equivalent).
Kongregate must have this information on file before payments may be processed to you.
You can view a list of the countries with which the U.S. has standing tax treaties, as well as the full text of those treaties, here.

If withholding applies, it will be reflected in your reporting through the Developer Portal, and payments will be made net of any required withholding.

When does tax withholding apply?

Withholding may apply in situations where:

tax laws require Kongregate to withhold a portion of payments to a developer
a developer has not provided valid or complete tax documentation
a developer is eligible for a different withholding rate based on their country of residence or tax treaty status

Contest winnings are also subject to withholding as "Other Income", also depending on current treaties and tax law.

How does this affect my payments?

If withholding applies:

the required amount will be deducted before payment is made
you will receive the net amount after withholding
the withholding will be reflected in the payment reporting

Can I reduce or avoid withholding?

In some cases, yes. Providing accurate tax documentation may allow:

the correct withholding rate to be applied
eligibility for reduced withholding under tax treaties, where applicable

You enter tax information when you upload your first game to Kongregate. You can also update it in your Kongregate Account Settings.

Go to Settings -> Payment Info
Fill out the form to enter or update payment options, and then tax information

Where can I learn more?

U.S. IRS – Withholding overview: https://www.irs.gov/businesses/small-businesses-self-employed/withholding

What can I do if the withholding is incorrect?

If you believe that we are withholding the wrong amount or you have any other questions concerning U.S. tax withholding, you can email developers@kongregate.com and we’ll do our best to answer your questions. We will not be able to give you specific tax advice, however, so your best resource for figuring out how to file returns, for example, is the Internal Revenue Service (IRS).

Important Note

Kongregate does not provide tax advice. Developers are responsible for understanding their own tax obligations and may wish to consult a qualified tax advisor.