If I pay one of my members more than $600/year, do I need to submit a form to the IRS? Do I need to be withholding part of their "income"? Does it make any difference if I'm only paying via PayPal and the money never actually goes to me (e.g. legally speaking, is PayPal paying them and not me)?

Thanks for your help.

If I pay one of my members more than $600/year, do I need to submit a form to the IRS?
No, the only time you do that is if you have a business license and the person fills out the paperwork with their social security number. You do want to keep track of how much you have brought in as far as income and how much you have paid out to the members, how much you have spent in advertising and all the other expenses that occur with running a program.

Do I need to be withholding part of their "income"?
No, the members are responsible for taking care of their taxes. They are also considered to being self employed.

Does it make any difference if I'm only paying via PayPal and the money never actually goes to me (e.g. legally speaking, is PayPal paying them and not me)?
You are the one paying them...the money is paid to you via paypal (or whatever system you use) and you are paying them.

Thanks quitbowl, I was wondering this myself.