YRM Prop for US Traders – Tax Rules, State Availability & US-Specific Guide

Short answer: Yes, YRM Prop fully supports US traders from all 50 states. As a New York-based LLC, the firm is optimized for American traders with Rise payout processing supporting all US states, no foreign transaction complications, and familiar regulatory framework. However, US traders face unique considerations around tax reporting (1099 requirements), state-level regulations, and how prop firm income is classified by the IRS.

This guide covers everything US traders need to know: state-by-state availability, tax implications and reporting requirements, regulatory status (SEC/CFTC), advantages of trading with a US-based firm, how YRM Prop compares to offshore alternatives, and critical tax planning strategies.

YRM Prop US Availability: All 50 States Supported

YRM Prop operates as YRM Prop LLC (registration number 10135785) based in New York at 85 Broad Street, 17th Floor, New York, NY 10004. The firm accepts traders from all 50 US states with no restrictions.

Complete US coverage:

✅ All 50 states can register for YRM Prop accounts
✅ Rise payment processor supports all US states
✅ No state-specific restrictions or limitations
✅ Same pricing and rules apply nationwide ($37/month 50K challenge)
✅ US bank accounts fully supported for Rise withdrawals

Why this matters:

Some prop firms restrict certain US states due to varying money transmitter licensing requirements, gambling regulations, or compliance complexity. YRM Prop's blanket US coverage means traders in traditionally restricted states (Nevada, Louisiana, Montana) can access the platform without workarounds.

State-specific note: While YRM Prop accepts all states, your state's tax laws may vary significantly. States like Texas, Florida, and Nevada have no state income tax, while California and New York have high state tax rates on trading income. This affects your net profitability but doesn't impact YRM Prop access.

Tax Implications for US Traders

The IRS treats prop firm income differently from traditional employment income. Understanding this classification is critical for tax planning and avoiding surprises at filing time.

How the IRS Views Prop Trading Income

Classification: Self-employment income (not W-2 wages)

When you receive payouts from YRM Prop through Rise, you're classified as an independent contractor, not an employee. This creates specific tax obligations:

What you pay:

• Federal income tax (10-37% based on income bracket)
• Self-employment tax (15.3% covering Social Security and Medicare)
• State income tax (0-13.3% depending on state)

Combined effective rate example:

• Federal: 22% (marginal rate for $89,075-$170,050 single filer in 2026)
• Self-employment: 15.3%
• State (California): 9.3%
• Total: ~46.6% of gross prop firm income

Comparison: A trader earning $50,000 from YRM Prop payouts would owe approximately $23,300 in combined federal, self-employment, and state taxes (California example). After-tax income: $26,700.

This is significantly higher than many traders expect, especially those coming from W-2 employment where employer pays half of payroll taxes.

1099 Reporting: Does YRM Prop Issue Forms?

As of January 2026, YRM Prop's specific 1099 issuance policy isn't publicly documented. However, standard prop firm practices suggest:

Likely scenario: YRM Prop may NOT issue 1099-NEC forms because:

• You're not technically their employee or contractor
• Payouts come through Rise (third-party processor)
• The simulated trading relationship differs from traditional contractor work

What this means for you:

You're still legally obligated to report ALL income even without a 1099. Failure to report prop firm income is tax evasion, regardless of whether you receive a form.

Record-keeping requirements:

Maintain detailed records of:

• Every payout request and approval
• Rise transfer confirmations with dates and amounts
• Total annual earnings from YRM Prop
• Trading-related expenses (platform fees, data subscriptions, education)

Tax filing: Report prop firm income on Schedule C (Profit or Loss from Business) as self-employment income. This allows deductions for business expenses but triggers self-employment tax.

Deductible Trading Expenses

As a self-employed trader, you can deduct legitimate business expenses to reduce taxable income:

Commonly deductible:

• YRM Prop monthly subscription fees ($37-$349/month)
• Instant Prime account purchases ($399-$899 one-time)
• Trading platform costs (Volumetrica, Quantower licenses if purchased separately)
• Market data subscriptions (beyond what YRM includes)
• Trading education (courses, books, coaching specifically for futures trading)
• Home office space (if used exclusively for trading)
• Internet costs (proportional business-use percentage)
• Computer and monitor equipment (depreciated or Section 179 expensed)
• Professional services (accountant fees, legal consultation)

Not deductible:

• Personal living expenses
• General investment education (not directly related to trading business)
• Failed challenge fees (typically not deductible as the evaluation isn't guaranteed income)

Example deduction scenario:

Annual YRM Prop earnings: $60,000
Deductible expenses: $8,000 (subscriptions, equipment, home office, education)
Net taxable income: $52,000
Self-employment tax: $7,344 (15.3% of $52,000 × 0.9235)
Federal income tax: ~$6,700 (22% bracket after standard deduction)
Total tax: ~$14,044 vs $17,280 without deductions = $3,236 saved

Trader Tax Status (TTS): Advanced Strategy

If you trade full-time and meet IRS requirements, you may qualify for Trader Tax Status, which offers significant benefits:

TTS requirements:

• Trading is your primary business activity (not supplemental income)
• Substantial trading activity (hundreds of trades per year minimum)
• Regular, continuous trading (most weeks throughout the year)
• Seek profit from short-term market movements (not long-term investing)

TTS benefits:

• Mark-to-market election avoids wash sale rules
• Deduct trading losses without capital loss limitations
• Deduct expenses on Schedule C rather than miscellaneous itemized deductions
• Potential to deduct health insurance premiums

For YRM Prop traders:

Qualifying for TTS with prop firm trading is complex because you're trading simulated capital, not your own. Consult a trader-specialized CPA to determine eligibility. Standard tax preparers often misunderstand prop firm income classification.

Resource: The Green Company specializes in trader taxation and has specific expertise with prop firm structures. Fees typically $500-$2,000 but can save thousands in taxes annually.

For complete payout and tax tracking, see the YRM Prop payout rules guide.

Regulatory Status: SEC and CFTC

Critical clarification: YRM Prop is NOT registered with the SEC (Securities and Exchange Commission) or CFTC (Commodity Futures Trading Commission).

Why This Isn't a Red Flag

Prop firms offering simulated trading accounts don't require SEC/CFTC registration because:

1. No securities trading: YRM Prop offers futures prop trading, not securities
2. Simulated capital: Starter Challenge uses demo capital, not real money you can lose
3. Contractor model: You're not investing capital that the firm manages
4. Evaluation service: The business model is educational evaluation, not investment management

What YRM Prop IS:

• A New York LLC providing trading evaluation services
• Operating under general business regulations
• Subject to standard business compliance (taxes, contracts, labor laws)

What YRM Prop is NOT:

• A registered investment adviser
• A broker-dealer
• A futures commission merchant (FCM)
• A commodity pool operator (CPO)

US Trader Protections

Legal framework: Your relationship with YRM Prop is governed by:

• Their Terms of Service (contractual agreement)
• General US contract law
• State-level consumer protection laws
• Rise's financial services compliance (FinCEN Money Service Business registration 31000314184255)

What this means:

• No FINRA arbitration for disputes
• No SIPC insurance protection
• No regulatory oversight of business practices
• Contract disputes resolved through courts or private arbitration

Comparison to traditional brokers:

FeatureYRM PropRegistered FCM (e.g., TD Ameritrade)SEC/CFTC RegistrationNoYesAccount InsuranceNoLimited (no profit guarantee)Regulatory OversightMinimalExtensiveDispute ResolutionContract/CourtsFINRA Arbitration AvailableCapital RiskSubscription fees onlyYour deposited capital

For traders concerned about regulatory protection, this explains why YRM Prop isn't regulated, as detailed in the Is YRM Prop legit review.

Advantages of YRM Prop for US Traders

Trading with a US-based prop firm offers specific advantages over offshore alternatives:

1. Domestic Payment Processing

YRM Prop → Rise → Your US Bank Account

No international wire transfers, no foreign transaction fees, no currency conversion confusion. Rise processes payouts in USD directly to your US bank account within 1-3 business days.

Offshore firm complications:

• International wire fees: $25-$50 per transfer
• Currency conversion losses: 1-3% per transaction
• Extended processing times: 5-10 business days
• Banking compliance questions about foreign sources

2. Familiar Legal Framework

Contracts governed by US law (New York jurisdiction). If disputes arise, you understand the legal system, language, and recourse options. Small claims court is accessible if needed for contract disputes under $5,000-$10,000 depending on state.

Offshore firm risks:

• Contracts under foreign law (Cyprus, Seychelles, BVI)
• Expensive international arbitration
• Limited practical recourse for US citizens
• Language and legal system barriers

3. Same Time Zone Trading

YRM Prop's futures focus means you're trading CME Group exchanges during regular US market hours:

• 9:30 AM - 4:00 PM ET (stock market hours)
• 6:00 PM - 5:00 PM ET next day (futures overnight session)

No staying up for London open or Asian session if you prefer US hours. Customer support operates on US time zones (Eastern).

4. No Foreign Account Reporting

US traders with foreign financial accounts exceeding $10,000 must file FBAR (FinCEN Form 114) and potentially FATCA Form 8938. YRM Prop's domestic structure eliminates these requirements:

Offshore prop firms:

• May trigger FBAR filing requirements
• Create tax reporting complexity
• Require tracking foreign account values throughout year

YRM Prop:

• Purely domestic financial relationship
• No foreign account reporting needed
• Simplified tax filing

5. Rise Infrastructure Benefits

Rise (the payment processor) is US-registered as a Money Service Business (FinCEN registration 31000314184255) with operations optimized for American traders:

• ACH transfers (1-2 days) instead of international wires
• US banking infrastructure familiarity
• Cryptocurrency withdrawals if preferred (instant)
• Support team operates on US hours

Complete Rise setup details available in the YRM Prop Rise payout setup guide.

How YRM Prop Compares to US Alternatives

Several established prop firms target US traders. Here's how YRM Prop stacks up:

YRM Prop vs Topstep (Chicago-based)

Topstep advantages:

• 13 years of operating history (established 2012)
• 10,000+ funded traders in 2024
• More platform options (NinjaTrader, TradingView)
• TopstepTV educational content

YRM Prop advantages:

• 25-60% cheaper ($37/month vs $49-$89)
• 90/10 profit split from day one (Topstep starts 80/20)
• Faster payout cycle (10 days vs bi-weekly)
• Static drawdown during challenge vs EOD trailing
• No daily loss limit during evaluation

For US traders: Both firms offer domestic operations, familiar legal framework, and USD payouts. Choice depends on cost sensitivity (YRM) versus established reputation (Topstep). Full comparison: YRM Prop vs Topstep.

YRM Prop vs Apex Trader Funding (Texas-based)

Apex advantages:

• Founded 2020 (longer track record than YRM)
• 20 funded accounts maximum (vs YRM's 3)
• Wider platform support

YRM Prop advantages:

• Significantly lower monthly fees
• 10-day payout cycle (Apex is bi-weekly)
• Static drawdown during challenge (Apex uses trailing)

For US traders: Both are domestic firms with similar tax implications. Apex allows more aggressive scaling (20 accounts), while YRM offers better cost structure for starting traders. Full comparison: YRM Prop vs Apex Trader Funding.

YRM Prop vs Offshore Firms (FTMO, MyForexFunds, etc.)

Offshore firm concerns for US traders:

• Foreign jurisdiction (Cyprus, Seychelles)
• International wire transfer fees and delays
• Potential FBAR filing requirements
• Contract disputes under foreign law
• Currency conversion complexity

YRM Prop benefits:

• US legal jurisdiction (New York)
• Domestic USD payments via Rise
• No international banking complications
• Familiar contract law and dispute resolution

Tax implications are similar (self-employment income) regardless of firm location, but payment processing and legal recourse favor domestic firms for US traders.

State Income Tax Planning

Your state of residence significantly impacts net profitability from prop trading. Here's how different states affect your take-home income:

No state income tax (9 states):

• Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, Wyoming

Example: $50,000 YRM Prop earnings
Federal + Self-employment tax: ~$10,700
State tax: $0
Net income: $39,300

High state tax (top marginal rates):

• California: 13.3%
• New York: 10.9%
• New Jersey: 10.75%
• Oregon: 9.9%

Example: $50,000 YRM Prop earnings in California
Federal + Self-employment tax: ~$10,700
State tax: ~$3,200
Net income: $36,100

Difference: $3,200/year ($266/month) — Equivalent to saving 8.5 monthly YRM subscriptions

Relocation considerations:

Some full-time prop traders relocate to zero-tax states to maximize income. However:

• Establish true residency (not just mailing address)
• Spend majority of year in the new state
• Update driver's license, voter registration
• Document the move (lease agreements, utility bills)

Warning: Simply claiming a different state while living elsewhere is tax fraud. States aggressively audit high-income individuals claiming out-of-state residence.

US Futures Market Access

YRM Prop's futures-only focus aligns perfectly with US traders because CME Group exchanges (CME, CBOT, NYMEX, COMEX) are the world's most liquid futures markets.

Trading hours (all times Eastern):

ES (E-mini S&P 500): 6:00 PM Sunday - 5:00 PM Friday
NQ (E-mini Nasdaq): 6:00 PM Sunday - 5:00 PM Friday
CL (Crude Oil): 6:00 PM Sunday - 5:00 PM Friday
GC (Gold): 6:00 PM Sunday - 5:00 PM Friday

US trader advantages:

• Trade during normal waking hours (9:30 AM - 4:00 PM ET for most liquid sessions)
• No need to stay up for London/Asian sessions
• Economic data releases during US morning (8:30 AM ET typically)
• Market analysis and education content timed for US audiences

Platform note: Volumetrica and Quantower (YRM Prop's platforms) are optimized for US futures markets with order flow analysis tools specifically designed for CME products, detailed in the YRM Prop trading platforms comparison.

FINRA and Background Checks

Question: Do you need FINRA licenses (Series 7, Series 63) to trade with YRM Prop?

Answer: No. YRM Prop is not a broker-dealer, and you're not acting as a registered representative. You don't need any securities licenses to participate.

Background checks:

YRM Prop doesn't appear to conduct credit checks or criminal background checks during signup. However, Rise requires KYC (Know Your Customer) verification including:

• Government-issued photo ID
• Social Security Number
• Proof of address
• Selfie verification

This KYC is for AML (Anti-Money Laundering) compliance, not employment screening. Past bankruptcies, credit issues, or non-financial criminal records typically don't disqualify you.

Disqualifying factors:

• Previous fraud convictions (financial crimes)
• Identity theft history
• Being on OFAC sanctions list
• Inability to verify identity documents

US Military and Government Employees

Can military service members trade with YRM Prop?

Yes, with considerations:

Active duty military:

• Can participate if not stationed in sanctioned countries
• Must comply with deployment restrictions (some combat zones prohibit day trading)
• Time zone challenges if stationed overseas (solution: trade during US market hours)

Security clearances:

• Standard Secret or Top Secret clearances don't prohibit prop trading
• Declare foreign contacts if trading internationally (not applicable for YRM - domestic firm)
• Some agencies require financial disclosure of side income

Government employees:

• Most federal employees can participate
• Exception: SEC, CFTC, and certain Treasury employees face trading restrictions
• State and local government employees typically have no restrictions

Recommendation: Review your specific agency's ethics rules and financial disclosure requirements. Consult your ethics officer if uncertain.

Retirement Account Integration

Can you fund YRM Prop from an IRA or 401(k)?

No. YRM Prop subscriptions and Instant Prime purchases must be paid from personal funds, not retirement accounts.

Can you contribute YRM Prop earnings to retirement accounts?

Yes! Self-employment income from prop trading qualifies for retirement contributions:

SEP-IRA:

• Contribute up to 25% of net self-employment income
• 2026 limit: $69,000
• Example: $60,000 net prop income → up to $15,000 SEP-IRA contribution

Solo 401(k):

• Employee contribution: Up to $23,000 (2026, under age 50)
• Employer contribution: Up to 25% of net income
• Combined 2026 limit: $69,000

Example: Trader earning $80,000 from YRM Prop after expenses could contribute:

• Employee: $23,000
• Employer: $20,000 (25% of $80,000)
• Total: $43,000 to Solo 401(k)

This significantly reduces taxable income while building retirement savings. Consult a CPA to set up self-employed retirement accounts.

COVID-Era Trading Boom Context

The 2020-2023 period saw explosive growth in retail trading and prop firms. Many US traders entered prop trading during this boom. Context for 2026:

What changed:

• Volatility normalized from COVID peaks
• Easy money policies ended (2022-2023 rate hikes)
• Competition among prop firms intensified
• Trader expectations adjusted from pandemic conditions

Why this matters for US traders:

Don't compare 2026 prop trading to 2020-2021 conditions. Those years featured extraordinary volatility, zero interest rates, and stimulus-driven market behavior. Current conditions require:

• More disciplined risk management
• Realistic profit expectations ($150-$250/day realistic vs $1,000+/day during peak volatility)
• Patience during consolidation periods
• Focus on consistency over home runs

YRM Prop's static drawdown and no daily loss limits during evaluation give structural advantages compared to 2020-2021 era rules at most firms.

US Trader Checklist

Before starting with YRM Prop, verify:

✅ State availability: All 50 states supported (no restrictions)
✅ Tax preparation: Understand self-employment tax obligations
✅ CPA consultation: Find trader-specialized accountant if earning >$20K annually
✅ Record keeping: Set up system for tracking all payouts and expenses
✅ Rise account: Create and verify before first payout attempt
✅ Bank account: US bank account ready for ACH transfers
✅ SSN/ITIN: Required for KYC verification
✅ State tax planning: Understand your state's income tax impact
✅ Time zone: Confirm your trading hours align with CME market sessions
✅ Platform access: Test Volumetrica or Quantower before paying for evaluation

For complete setup guidance, see YRM Prop setup guide.

US Trader FAQ

Do I need to report YRM Prop income if I don't receive a 1099?

Yes, absolutely. All income is taxable whether or not you receive a form. Failure to report is tax evasion. Keep detailed records of all payouts and report on Schedule C.

What tax bracket applies to prop trading income?

Your combined income from all sources determines your marginal federal tax bracket (10-37%). Prop trading income adds to your total taxable income and is also subject to 15.3% self-employment tax.

Can I deduct my failed challenge subscriptions?

Possibly, if you're treating prop trading as a business. Consult a CPA. Generally, startup costs before establishing a trade or business are handled differently than ongoing business expenses.

Is YRM Prop legal in the United States?

Yes. YRM Prop operates as a legitimate LLC providing trading evaluation services. The firm isn't regulated by SEC/CFTC because it doesn't offer securities or managed futures accounts.

Do I need any licenses to trade futures with YRM Prop?

No. You don't need Series 7, Series 63, or any other licenses. You're trading simulated capital for evaluation purposes, not executing trades for clients or managing other people's money.

How does YRM Prop compare to trading my own account?

YRM Prop provides capital leverage (up to $450K across 3 accounts) without risking your own money beyond subscription fees. However, you keep only 90% of profits. Personal trading = 100% of profits but 100% of losses.

Are there any age restrictions for US traders?

You must be 18+ to enter contracts. Some states require 19 or 21 for certain financial agreements. Minors cannot participate even with parental consent.

What happens to my YRM Prop income during unemployment?

Prop trading income can disqualify you from unemployment benefits in most states because you're engaged in self-employment. Consult your state's unemployment office before pursuing prop trading while collecting benefits.

Can I write off my home office for prop trading?

Yes, if you use a dedicated space exclusively for trading. Calculate the square footage percentage of your home and deduct proportional rent/mortgage, utilities, insurance. Strict rules apply — consult a CPA.

Does YRM Prop work with international US citizens living abroad?

US citizens living abroad can potentially use YRM Prop, but must verify Rise supports their country of residence. You're still subject to US tax obligations regardless of where you live (US taxes worldwide income for citizens).

Final Recommendations for US Traders

Start with the $50K challenge at $37/month. This minimizes your taxable expense while testing the platform and rules. Only scale to larger accounts after proving consistent profitability.

Set aside 40-50% of every payout for taxes. Don't spend prop firm income as if it's take-home pay. Federal + self-employment + state taxes will claim ~40-50% depending on your state.

Find a trader-specialized CPA. Standard tax preparers often mishandle prop firm income. A specialist costs more ($500-$2,000) but saves multiples of that in proper deductions and tax planning.

Consider zero-tax state residency if trading full-time. Relocating to Florida, Texas, or Nevada can save $5,000-$15,000 annually for high-earning traders. But establish true residency — don't commit tax fraud with fake addresses.

Maintain meticulous records. Every payout, every expense, every trading day. If you're audited, detailed records protect you. Use accounting software (QuickBooks Self-Employed, Wave) to track everything.

For step-by-step passing strategies, see How to pass YRM Prop Starter Challenge. For tax tracking and payout details, review the YRM Prop FAQ.

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