How to File IRS Form W-9

Tax Form W-9 Explained

IRS Form W-9
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If you're an independent contractor, consultant, or another type of self-employed worker, the company you're providing a service for will ask you to complete Internal Revenue Service (IRS) Form W-9 if your total compensation for the year will exceed $600. The company will use that form to complete its Form 1099-NEC, which reports to the IRS the amount of income it has paid to non-employees.

Because of the sensitive information requested in the form—primarily your taxpayer identification number (TIN), which is either your Social Security or employer ID number—you should be certain the entity asking you to complete the form has a legitimate reason for doing so.

What Is IRS Form W-9?

Form W-9 is an IRS-created form that provides taxpayer information to the entity that requested it. It is not filed with the IRS; it's returned to the requester.

The form is filled out by independent contractors who provide services to companies that have not hired them as full-time employees. If you are paid $600 or less in a single year by a company, you will not need to fill out the form for that company.

Companies use the information to report to the IRS how much non-employee compensation they paid in a given tax year. Starting again with the 2020 tax year, companies will use Form 1099-NEC to provide that info. The form had been discontinued in 1982, with Form 1099-MISC taking its place. Companies will still use 1099-MISC for payments to non-employees made in the 2019 tax year.

Companies must also file a 1099-NEC with the IRS if they have paid more than $600 to an attorney or someone who catches fish for a living.

IRS Form W-9

Where to Get a Form W-9

In most cases, the business you're contracting with will send you a blank Form W-9 and ask you to complete it.

If you are an independent contractor and you didn't receive a W-9 from a company you've done more than $600 of work for or if you or your company is in the position of having to issue Form W-9s to independent contractors, you can download the form from the IRS website.

Filling Out Form W-9

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Completing Form W-9 is pretty straightforward. At the top of the form, provide your name and the name of your business if it's different from your own name. Select your federal tax classification (such as individual/sole proprietor or single-member limited liability company [LLC], C corporation, S corporation, partnership, trust or estate, or LLC with more than one member) and write in your address.

Your name should be given as it appears on your federal income tax return.

In Part I, fill in your TIN. Sign and date Part 2. You're certifying to the IRS that the TIN you're providing is correct.

Who Is Subject to Backup Withholding?

You are also certifying on Form W-9 that you are not subject to backup withholding. If you were, you would have received a notice from the IRS informing you you were and the company paying you would have to withhold 24% in federal income taxes, even though independent contractors are generally responsible for paying their own taxes.

The two main reasons for backup withholding are: You previously hadn't provided your correct TIN or you failed to report or underreported your interest and dividend income on your federal income tax return.

If you are subject to backup withholding, the IRS recommends you quickly correct your TIN or the underreporting and pay the amount you owe.

Potential Problems With the Form

Form W-9 is a standard tax document. By itself, it doesn't pose many problems, but there are a few situations that might wave a red flag.

  • You don't know the person or business that's asking you to fill out the W-9. You should always exercise caution when giving out sensitive information like your TIN. Make sure you know who's asking you to fill out the form, why they’re doing so, and how the tax information you supply will be used.
  • Be sure to send the W-9 securely. Don’t send your completed W-9 as an unsecured or unencrypted email attachment. Use a secure method of delivery, such as hand delivery, the U.S. mail, or an encrypted file in an email.
  • You expected a Form W-4 instead. If you're starting a new job and your employer hands you a W-9 to fill out, ask whether you’ll be working as a self-employed independent contractor or as an employee. Employees complete Form W-4, not Form W-9, to set their tax withholdings.

You're generally not considered to be an independent contractor if your employer controls when, where, and how you do your job and when and how you're paid and if the job provides any sort of employee benefits.

How Often Should I Update a Form W-9? 

You should submit a new Form W-9 whenever any information you provided on the previous one has changed. Fill out a new form if your name, business name, address, Social Security number, or employer identification number has changed.

Key Takeaways

  • Form W-9 is an IRS form that is filled out by self-employed workers for companies they are providing services for.
  • Form W-9 is sent to the company that requested it, not to the IRS.
  • Companies use W-9's to file Form 1099-NEC or Form 1099-MISC, both of which notify the IRS how much they've paid to non-employees during a tax year.
  • The main purpose of the W-9 is to provide your correct taxpayer ID number to the company you're contracting with.

The information contained in this article is not tax or legal advice and is not a substitute for such advice. State and federal laws change frequently, and the information in this article may not reflect your own state’s laws or the most recent changes to the law. For current tax or legal advice, please consult with an accountant or an attorney.

Article Sources

  1. Internal Revenue Service. "Reporting Payments to Independent Contractors." Accessed June 13, 2020.

  2. Morgan Lewis. "Nonemployee Compensation Reportable on Revived Form 1099-NEC for 2020 Payments." Accessed June 13, 2020.

  3. Internal Revenue Service. "Instructions for Forms 1099-MISC and 1099-NEC (2020)." Accessed June 13, 2020.

  4. Internal Revenue Service. "Form W-9," Pages 1-4. Accessed June 13, 2020.

  5. TurboTax. "Self-Employed Federal Income Taxes." Accessed June 13, 2020.

  6. Internal Revenue Service. "Topic No. 307 Backup Withholding." Accessed June 13, 2020.

  7. Internal Revenue Service. "Topic No. 753 Form W-4 – Employee's Withholding Certificate." Accessed June 13, 2020.

  8. Internal Revenue Service. "Independent Contractor (Self-Employed) or Employee?" Accessed June 13, 2020.