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Highlights and key takeaways
- Form W-9 is an “information return,” meaning it’s just for giving someone else a piece of information they need (rather than the IRS). But because you’re not sending it to the IRS, you need to be careful about who exactly you send it to.
- The IRS made two updates to Form W-9 in December 2023, affecting Form W-9 for the 2024 tax year. These updates impact pass-through entities with foreign owners, partners, or beneficiaries.
What is form W-9?
IRS Form W-9, Request for Taxpayer Identification Number and Certification is a one-page IRS tax document that individuals and businesses use to send the correct taxpayer identification number to other individuals, clients, banks, and financial institutions.
Most often, when you’re a self-employed contractor, you send it to someone so that they can then send you back Form 1099, which you need to submit to the IRS if someone paid you more than $600 this year.
Form W-9 does not get sent to the IRS.
Changes to form W-9 for the 2024 tax year
The IRS revised the form in December 2023. While these changes won’t affect many self-employed individuals, they may affect owners of partnerships or other pass-through businesses that have beneficiaries, owners, or partners in a country other than the U.S.
Revisions:
- Guidance has been added to Line 3a, stating that Line 3a is not applicable for a disregarded entity. A disregarded entity is a business with one single owner that is not a corporation and is not taxed separately—in other words, a single-owner pass-through business.
- Line 3b has been added to the form. This line is for partnerships to declare any foreign partners, owners, or beneficiaries.
Who has to fill out a W-9?
There are four common situations in which you might be required to fill out and send someone a W-9 form:
- You’re a contractor, freelancer, or consultant and plan on getting paid more than $600 by one particular client in a tax year. They’ll need you (the payee) to send them a completed W-9 before they can send you a Form 1099-MISC form. You’ll need that to report your income to the IRS.
- Banks sometimes also need a W-9 when you open a new account with them.
- Your bank or the financial institution you invest with might also need a completed W-9 from you in order to submit one of the other types of 1099 forms, which they’ll use to report things like interest income, distributions, and proceeds from real estate transactions (i.e., if you sell your house).
- If someone forgives or cancels a debt you owe them, they’ll need to file Form 1099-C with the IRS. They’ll need you to send them a completed W-9 to complete the process.
You typically will only need to collect a W-9 from a contractor, or send your filled-out W-9 to a client, once—not every year. The only time you would need to send an updated W-9 is if information like your name, address, or business entity type changes.
If someone other than a client, bank, or other financial institution asks you for a W-9 form, you might want to think twice about sending one. This type of information can lead to identity theft and should be protected as such.
What is backup withholding?
If the IRS has told a contractor that they’re subject to “backup withholding,” that means the businesses paying the contractor’s invoices have to withhold income tax at a flat 24% from the invoice and remit it to the IRS.
If a contractor is subject to backup withholding, they’ll have to indicate that on their W-9.
To learn more about who is subject to backup withholding, check out this IRS page.
When you should NOT send someone a W-9
If you get one from someone you don’t know
If you’re a contractor and you receive a Form W-9 from an individual or business who is not a client, don’t fill it out. Sending your Social Security number (SSN) and other personal information to a stranger could be dangerous. Scammers will sometimes send W-9s to collect the SSNs of unsuspecting individuals.
If you’re suspicious about a W-9 that someone has sent you, ask them which tax forms they plan on sending you back after you fill it out. If you can’t get a straight answer, talk to a tax professional. Remember that the only reason anyone would ever need a W-9 from you is because they need it to send you some kind of IRS form.
If your employer sends you one
Employers shouldn’t ask you for a W-9 either. The appropriate form for them is Form W-4. If you’re starting a full-time job and your employer hands you a W-9 instead of a W-4, that could mean they’ve hired you as an independent contractor rather than an employee, and you could be on the hook for tax payments to the IRS.
Where do I get one?
Your client, bank, or other financial institution has to send you a W-9 themselves if they need you to fill one out. If you think you have to fill one out, it’s probably already on the way. You can also find a PDF version of it on the IRS website.
What does it look like?
W-9 is a one-page form from the IRS. It also comes with five pages of instructions. The part that you have to fill out looks like this:
How do I complete form W-9?
The information part at the top:
1. Print your full legal name (as it appears on your income tax return) here.
2. If you operate under a business name (or disregarded entity name), write that here.
3a. “Federal tax classification” is a fancy way of saying, “How does your business file your taxes.” In this part, you must report what kind of business entity type you are for tax purposes by checking the appropriate box. You’ve got seven different choices:
- Sole proprietor/single-member LLC. If you’re doing business, don’t have a business partner, and haven’t incorporated your business, you’re probably a sole prop.
- C corporation. If your company has shareholders and a board of directors and pays its taxes separately from its owners, it’s probably a C corp.
- S corporation. If you’re an incorporated flow-through entity (i.e., you only pay taxes once, rather than twice like a C corp), you’re probably an S corp.
- Partnership. If you’re unincorporated and share ownership of your business with one or more other people, you’re probably a partnership.
- Trust/estate
- Limited liability company. If you behave like a corporation at the state level but are taxed like a partnership or sole proprietorship at the federal level, you’re likely an LLC! Since an LLC is what’s called a “disregarded entity,” they can be taxed as a C corp, S corp, or partnership. Print C, S, or P in the box to indicate which one applies to you.
- Other. This one’s for people who are filing outside the United States. If you’re an international business entity and don’t know how you fit into the American system, check out the IRS’s guide to international business entities.
3b. If you are an LLC being taxed as a partnership, a trust/estate, or partnership, and you are providing the form to another partnership in which you hold an ownership stake, and you have foreign beneficiaries, partners, or owners, check the box.
5-6. Enter your contact information here.
7. The account number(s) section only applies if you need to send account information (like a brokerage account) to the recipient of form W-9. If you’re unsure, it’s best to reach out to whoever requested the form W-9 from you.
‘Part I’
When someone wants you to send them a W-9, this is what they want from you: either a Social Security number (SSN) or an Employer Identification Number (EIN).
If your business has any employees or operates as a corporation or partnership, it probably needs an EIN to do business and file with the IRS properly. If you need one, check out the IRS’s online application form for the EIN.
If you’re a resident alien and aren’t eligible for an SSN, your TIN is the IRS individual taxpayer identification number (ITIN).
Don’t have a TIN? You can write “Applied For” in the space provided. But this certifies that you have applied or are in the process of applying for a TIN.
‘Part II’
Signing and dating this section certifies that all of the information you’re entering here is correct.
When should I send W-9?
If someone is asking you for a completed Form W-9, they likely need it to send you a Form 1099, which you’ll need to report certain kinds of income to the IRS. Common examples of payments requiring a Form 1099 are nonemployee compensation (1099-NEC), miscellaneous income (1099-MISC), dividends (1099-DIV), and cancellation of debt (1099-C).
Although there’s no official deadline for filing your W-9, you should fill it out as soon as you get one. Promptly completing form W-9 ensures you will get your tax forms in return as quickly as possible. And remember: if you fail to send someone a W-9 or send one with the wrong information, you may be subject to a $50 penalty of perjury. Double-check that your completed form W-9 has the correct TIN before sending it.
What if I’m collecting W-9s? Any tips on getting people to file?
If your small business is collecting W-9s, you should make sure to send them well before the 1099 deadline. The deadline for form 1099-MISC and 1099-NEC is January 31, and most other 1099s are due around the same time.
To be safe, some businesses will send out Form W-9 to every single one of their contractors to fill out ahead of time, even if they don’t expect them to perform $600 of work for them. Some accountants will even suggest collecting a W-9 before issuing any payments at all to encourage people to file up-front.
