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The Basics to Canceling Sponsorship

What happens when sponsors cancel their sponsorship?

This article covers the following questions:

  • What happens once a sponsor cancels their sponsorship?
  • What are the potential tax implications for sponsors?
  • How do sponsors view their tax documents?
  • Will sponsors have to liquidate their sponsored person’s bitcoin or stocks?
  • Can a sponsored person have their own account without a sponsor?

When a sponsorship is canceled, the sponsored person’s account will be restricted and access to most features, including payments, Cash Card, bitcoin and Investing, will be disabled. The previously sponsored person will still be able to add a linked bank account and withdraw money from their Cash balance.

If the sponsor doesn’t have their own Cash Card and is not sponsoring any other accounts, they’ll lose FDIC insurance coverage. To regain coverage, the previous sponsor can order a Cash Card. Any recurring allowance payments set up for the sponsored person will be canceled.

After sponsorship is canceled, the previously sponsored person can request approval from a different sponsor to regain access to Cash Card, bitcoin, and investing features. Customers 18 and older can verify their identity to get an individual account and regain access to these features.

Here’s what happens once your sponsorship is canceled:

For accounts with Cash Cards/direct deposits:

  • If the sponsored person has a Cash Card or direct deposit setup, it will be terminated. We will also liquidate any gift card balances into the sponsored person’s Cash balance.

For accounts with bitcoin:

  • If the sponsored person holds bitcoin, it will be liquidated.The bitcoin balance will be converted to fiat (USD) and the funds will be added to the sponsored person’s Cash balance.

For accounts with stock holdings:

If the sponsored person holds stocks, the stocks will be liquidated, and the sale proceeds will be added to the sponsored person’s Cash balance.

Additional Tax Information:

Sponsors are responsible for all tax reporting obligations resulting from stock and/or bitcoin sales in the sponsored account, including any tax consequences resulting from the liquidation of stock and/or bitcoin in the sponsored account. Form 1099 is issued in the sponsor’s name.

Neither Cash App nor Cash App Investing provide tax advice. If you have questions about your particular tax situation, consult a tax advisor.

To view the sponsor’s tax documents:

  1. Tap the Profile icon (in the top right hand corner)
  2. Tap Documents
  3. Tap Bitcoin OR Stocks
  4. Tap Tax Documents
  5. Select your sponsored account’s tax document

To initiate the sponsorship cancellation:

If you are a sponsor and would like to cancel your sponsorship, please contact Cash App Support to start the process.

Brokerage services by Cash App Investing LLC, member FINRA / SIPC, and a subsidiary of Block, Inc., formerly known as Square, Inc. Investing and purchasing bitcoin involves risk; you may lose money. Bitcoin trading is offered by Block, Inc. Cash App Investing does not trade bitcoin and Block, Inc. is not a member of FINRA or SIPC. For additional information, see the Bitcoin and Cash App Investing disclosures.

Cash App Investing is a self-directed service; you are solely responsible for orders placed through your account. Cash App Investing does not provide investment advice or recommendations.

Selling shares may have tax implications. If you have questions about your particular tax situation you should consult a tax advisor.

Cash App is not a bank. Banking services provided by Cash App's bank partner(s). Prepaid debit cards issued by Sutton Bank.


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