At DADYMINDS, we are committed to maintaining transparency, fairness, and compliance with U.S. tax laws in all aspects of our payout and tax management processes. This policy outlines how payments are managed, tax obligations are fulfilled, and records are maintained to ensure clarity and trust for employees, contractors, and partners.

1. Purpose of the Policy

This policy aims to:

• Ensure all payouts are accurate, timely, and compliant with applicable laws.
• Clarify roles and responsibilities regarding tax obligations for employees, contractors, and partners.
• Foster trust and transparency in financial dealings.

2. Scope of the Policy

This policy applies to:

• Employees: Individuals hired by DADYMINDS on a full-time or part-time basis as agreed per employee agreement.
• Contractors: Independent contractors, freelancers, and other non-employee service providers.
• Partners: Authors, collaborators, ambassadors and other stakeholders receiving royalties or profit-sharing payments.

3. Payout Policies

a. Payment Frequency

• Employees: Paid bi-weekly via direct deposit unless otherwise specified in the employment agreement.
• Contractors: Paid upon completion of agreed-upon milestones or within 30 days of invoice submission.
• Authors and Royalties: Royalties are disbursed quarterly, with statements provided detailing sales and earnings.

b. Payment Methods

• Direct deposit (preferred method).
• Wire Transfers
• Payoneer (upon request; sends to all payoneer-supported currencies).
• Remitly (Upon Request; sends to all supported banks and mobile money processors)
• Digital payment platforms (e.g., Tipalti, Stripe, PayPal, ACH transfers) for contractors and international payments.

c. Dispute Resolution

Any payment discrepancies must be reported to the DADYMINDS finance team within 30 days of receipt. Disputes will be resolved within 14 business days.

4. Tax Obligations

a. Employees

• DADYMINDS deducts federal and state taxes from employee wages, including income tax, Social Security, and Medicare.
• Employees must complete a W-4 form upon hiring to ensure correct tax withholding.
• Employees receive a W-2 form annually for tax filing purposes.

b. Contractors

• Contractors are responsible for their tax obligations, including self-employment taxes.
• DADYMINDS issues a 1099-NEC form to contractors earning $600 or more in a calendar year.
• If a contractor fails to provide a valid Tax Identification Number (TIN), backup withholding (24%) will be applied.

c. Authors and Royalties

• Authors receiving royalties are classified as independent contractors for tax purposes.
• DADYMINDS provides a 1099-NEC form to authors earning $600 or more annually.
• Foreign authors must complete a W-8BEN form to claim treaty benefits and avoid excessive tax withholding.

d. State and Local Tax Compliance

DADYMINDS ensures compliance with state-specific payroll taxes, unemployment insurance contributions, and workers’ compensation requirements.

e. International Payments

• Payments to international contractors and authors are subject to U.S. withholding tax regulations.
• Currency conversion rates will be applied at the time of payment, and fees will be deducted from the payout where applicable.

5. Record-Keeping

• Financial and tax records are retained for at least 7 years, as the IRS requires.
• Records include payroll reports, invoices, royalty statements, and tax filings.
• All records are stored securely to protect sensitive information.

6. Royalties and Special Payments

a. Royalty Calculations

• Royalties are based on a percentage of net sales unless otherwise specified in the author’s contract.
• Net sales are calculated after deductions such as discounts, returns, and distribution fees.

b. Payment Schedule

• Royalties are disbursed quarterly within 45 days following the end of the quarter.

c. Royalty Statements

• Authors receive detailed royalty statements, including sales data, returns, and deductions.

d. Film Rights Advances

• Advances (if applicable) are recouped from future royalty earnings.

7. Security and Confidentiality

• Sensitive financial information is handled with the highest level of security.
• DADYMINDS complies with data protection laws, including GDPR for international partners, to safeguard personal and financial data.

8. Policy Updates and Reviews

• This policy is reviewed annually to ensure compliance with tax laws and changes in business practices.
• Employees, contractors, and partners will be notified of significant updates.

9. Acknowledgment

By signing our different working agreements/contracts, all employees, contractors, and partners confirm that they have read, understood, and agreed to this policy.

Contact Information

For questions regarding this policy, contact the DADYMINDS finance team at:

• Email: support@dadyminds.org 
• Mail: 
  1007 N Orange St
  4th Floor Suite #2987
  New Castle
  Wilmington, Delaware 19801
  United States

By adhering to this policy, DADYMINDS ensures a fair and compliant approach to payouts and tax management, fostering trust and accountability across all partnerships.