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.

The IRS requires companies to file a 1099-NEC if they have paid more than $600 to two specific kinds of professional worker: an attorney or someone who catches fish for a living.

IRS Form W-9

Who Uses Form W-9?

Companies who use non-employees to perform work for them must send the W-9 to these workers, and the workers must return the completed form to the companies.

A company may also create its own substitute version of Form W-9 provided it is substantially similar to the IRS form and it lists the same certifications.

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.

What to Do If You Don't Receive a W-9

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 Forms W-9 to independent contractors, you can download the form from the IRS website.

How to Fill Out and Read Form W-9

How to fill our form w-9
The Balance

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.

Exemption Codes

You should fill in any codes that apply to your being exempt from backup withholding or from Foreign Account Tax Compliance Act (FATCA) reporting. Sole proprietors are generally not exempt from backup withholding, but corporations are exempt from backup withholding for payments such as interest and dividends.

Backup withholding is when a paying entity takes 24% of your payment amount in federal income taxes, even though independent contractors are generally responsible for paying their own taxes.

The Foreign Account Tax Compliance Act (FATCA) pertains to foreign financial institutions, so it almost certainly doesn't apply to you. For more information on these exemptions and the codes used for them, see pages 3 and 4 of Form W-9. 

Certifications

In Part I, fill in your TIN. Sign and date Part II. You're certifying to the IRS that the TIN you're providing is correct. You are also certifying that you are a U.S. citizen or other U.S. person, that any codes you entered are correct, and that you are not subject to backup withholding.

The IRS defines a U.S. person as one of the following: an individual who is a U.S. citizen or U.S. resident alien; a partnership, corporation, company, or association created or organized in the United States or under the laws of the United States; a domestic estate; or a domestic trust.

If you were subject to backup withholding, you would have received a notice from the IRS informing you of that fact and the company paying you would have to withhold 24% of your payment in federal income taxes. There are two main reasons why you might be subject to backup withholding: 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, you should cross out item 2 under Certification before signing the W-9. 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.
  • You are allowing someone to access your private information. 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 July 11, 2020.

  2. Morgan Lewis. "Nonemployee Compensation Reportable on Revived Form 1099-NEC for 2020 Payments." Accessed July 11, 2020.

  3. Internal Revenue Service. "Instructions for Forms 1099-MISC and 1099-NEC (2020)." Accessed July 11, 2020.

  4. Internal Revenue Service. "Instructions for the Requester of Form W-9 (10/2018)." Accessed July 11, 2020.

  5. TurboTax. "Self-Employed Federal Income Taxes." Accessed July 11, 2020.

  6. Internal Revenue Service. "Form W-9, Request for Taxpayer Identification Number and Certification," Pages 1-4. Accessed July 11, 2020.

  7. Internal Revenue Service. "Form W-9, Request for Taxpayer Identification Number and Certification," Page 2. Accessed July 11, 2020.

  8. Internal Revenue Service. "Topic No. 307 Backup Withholding." Accessed July 11, 2020.

  9. Internal Revenue Service. "Form W-9, Request for Taxpayer Identification Number and Certification," Page 1. Accessed July 11, 2020.

  10. Internal Revenue Service. "Topic No. 753 Form W-4 – Employee's Withholding Certificate." Accessed July 11, 2020.

  11. Internal Revenue Service. "Independent Contractor (Self-Employed) or Employee?" Accessed July 11, 2020.