Key Takeaways
- IRS form for providing Taxpayer Identification Number.
- Used by U.S. persons to avoid backup withholding.
- Required by payers for accurate 1099 reporting.
- Not filed with IRS; kept by payers only.
What is W-9 Form?
The W-9 Form, officially titled "Request for Taxpayer Identification Number and Certification," is an IRS document used by U.S. persons to provide their Taxpayer Identification Number (TIN) to entities that must report certain payments to the IRS. This form is essential for accurate income reporting and tax compliance, but it is not filed directly with the IRS.
It is commonly requested from individuals, businesses, and other U.S. entities to certify their taxpayer information and avoid backup withholding.
Key Characteristics
The W-9 Form serves multiple important functions for tax reporting and verification. Key features include:
- Purpose: Used to provide your correct TIN, such as SSN, ITIN, or EIN, to payers required to file information returns like Form 1099.
- Certification: You certify that you are a U.S. person and that your TIN is accurate to avoid backup withholding.
- Usage: Required for independent contractors, freelancers, and business entities—including C corporations—to report income.
- Non-filing: The form is kept by the payer and not submitted to the IRS itself.
- Backup withholding: Failure to provide a valid W-9 can result in a 24% withholding on payments.
How It Works
When you perform work or receive payments as a U.S. person, the payer requests a W-9 Form to obtain your TIN and certification. You complete the form by entering your legal name, business name (if applicable), address, and TIN, then sign and date it to confirm the accuracy.
Payers use this information to prepare IRS forms such as the 1099-NEC or 1099-MISC, which report your taxable income. This process ensures the IRS can match income reported by payers with your tax return, minimizing errors and penalties. For foreign persons, a W-8 Form is used instead of a W-9.
Examples and Use Cases
The W-9 Form is widely used across industries and by various payees. Common examples include:
- Freelancers and Contractors: A graphic designer hired by a company provides a W-9 to report income and avoid backup withholding.
- Businesses: Entities like Delta or other corporations require W-9 forms from their vendors and contractors to comply with IRS reporting rules.
- Financial Transactions: Individuals selling stocks or receiving dividends may provide a W-9 to brokers or financial institutions, which can be relevant when using services like those found in best online brokers.
- Other Payments: Rent, royalties, and mortgage interest payments often require the recipient to submit a W-9 for proper IRS documentation.
Important Considerations
Always keep your W-9 information current; a new form is necessary if your name, address, or TIN changes. Providing incorrect details can trigger backup withholding or delayed tax reporting. If you operate a business, understanding your entity type, such as a C corporation, helps ensure accurate classification on the form.
For business owners looking to manage expenses or income efficiently, consider resources like our best business credit cards guide to complement proper tax documentation and financial management.
Final Words
Providing an accurate W-9 form ensures your income is reported correctly and helps you avoid backup withholding. Keep your information updated and submit a new form whenever your details change.
Frequently Asked Questions
Form W-9 is used by U.S. persons to provide their Taxpayer Identification Number (TIN) to payers who need it to report certain payments to the IRS. It helps ensure accurate tax reporting and certifies that you are not subject to backup withholding.
U.S. persons, including individuals, independent contractors, freelancers, businesses, and resident aliens who receive reportable payments, must complete a W-9. This includes anyone paid $600 or more annually by a business or receiving other reportable income like dividends or rents.
No, you do not file Form W-9 with the IRS. Instead, you provide it to the payer who requested it, and they use it to prepare information returns such as Form 1099 for IRS reporting.
If you fail to provide a valid W-9, the payer may be required to withhold 24% of your payments as backup withholding and send that amount to the IRS. This backup withholding helps ensure taxes are collected if your TIN is missing or incorrect.
You should submit a new W-9 if your name, business name, address, or Taxpayer Identification Number changes to keep the payer’s records accurate and avoid backup withholding.
Download the latest W-9 form from IRS.gov, enter your legal name, business name if applicable, and U.S. mailing address. Provide your correct TIN (SSN, ITIN, or EIN), sign, and date the form before giving it to the requester.
No, non-U.S. persons generally use Form W-8 instead to certify their foreign status and claim any applicable tax treaty benefits. Form W-9 is only for U.S. persons.
