Last reviewed: May 10, 2026. This page is an educational reference. It does not replace the Terms of Service or Privacy Policy, and it is not legal or tax advice.
EarnDrift is a tool — you are the filer of record
EarnDrift helps you organize contractor payments, surface threshold exposure, and prepare draft 1099-NEC worksheets and filing-service CSVs. EarnDrift does not file 1099s with the IRS on your behalf. You (or your accountant or filing service) are the filer of record and are responsible for the accuracy, completeness, and timeliness of every form submitted. Worksheets we generate are labelled DRAFT — Reference Only and cannot be submitted to the IRS.
Estimates and projections are estimates
Penalty calculators, threshold projections, tax exposure numbers, year-end readiness scores, and similar figures shown in EarnDrift are estimates based on the data you've connected or entered. They are designed to surface risk early — not to replace a CPA's review. Actual IRS penalties, withholding obligations, and final 1099 amounts may differ.
W-9 collection and TIN verification
EarnDrift collects W-9 information from contractors via secure forms and stores full TINs encrypted at rest using pgcrypto. EarnDrift does not currently verify recipient TINs against the IRS TIN Matching Program; TINs are checked for format only. You should reconcile any backup-withholding obligations (24% under IRC §3406) with your CPA before filing if a contractor crossed the reporting threshold without a TIN on file.
AI-assisted document extraction
When you upload a prior-year 1099 PDF, the document is processed by a third-party AI provider (Google Gemini) to extract contractor data. The provider does not retain the document after processing and does not use uploaded content to train models. Extracted data is shown to you for review before it is saved — always confirm names, TINs, and amounts against the source PDF.
Worker classification is your responsibility
Whether a worker is a 1099 contractor or a W-2 employee is determined by federal and state law (IRS 20-factor common-law test, California AB-5 / Borello, and equivalent state tests), not by what you call them in EarnDrift. EarnDrift does not classify workers for you. If you are unsure whether a worker should be a W-2 employee, talk to an employment attorney or CPA before using 1099 features.
Bank data via Plaid
EarnDrift connects to your financial institutions through Plaid. Plaid handles the bank login flow — EarnDrift never sees or stores your bank credentials. Transaction data flows from Plaid to EarnDrift under Plaid's privacy policy. Categorization decisions made by EarnDrift are heuristics, not audited determinations.
Payment rails and timing
Contractor payouts initiated through EarnDrift's payment features settle via standard ACH through our payments partner. Typical timelines are 1–3 business days for the contractor leg and 4–6 business days end-to-end; same-day settlement is not guaranteed. EarnDrift is not a money transmitter and does not custody funds — payments move directly between your funding account and the contractor's account through the partner network.
Educational content — not legal or tax advice
Articles, state guides, calculators, and in-app tips are provided for general educational purposes. Tax law (federal, state, and local) changes frequently. References to OBBBA 2026 thresholds, penalty schedules, and state filing rules reflect our best understanding as of the page's last-reviewed date. Always confirm with the IRS, your state revenue agency, or a licensed professional before relying on any figure to make a filing decision.
