Businesses, banks, brokers, and other payers can need W-9 information so they can prepare an information return using the correct taxpayer name and identification number. The form itself does not calculate income tax or determine how much a worker owes.
Key Takeaways
- Taxpayer information: A W-9 commonly provides a name, federal tax classification, address, and TIN.
- Requester retains the form: A completed W-9 is generally given to the person or business requesting it, not mailed to the IRS by the person completing it.
- Certification matters: The signer certifies the TIN and other statements under penalties of perjury.
- Different from a 1099: The W-9 gathers information that can later be used to prepare certain information returns.
What Is Form W-9 Used For?
Requesters use Form W-9 to obtain information needed for federal tax reporting. Common situations include payments for services, interest, dividends, real-estate transactions, mortgage interest, cancellation of debt, and IRA contributions.
For an individual, the TIN is commonly a Social Security number. Businesses and other entities may use an employer identification number, depending on their tax classification and the instructions that apply.
Who Completes a W-9?
Form W-9 is designed for U.S. persons, including qualifying individuals and entities, when a requester needs their taxpayer information. Independent contractors and freelancers commonly encounter it before or during a business relationship.
Employees generally use Form W-4 for federal income tax withholding rather than W-9. Foreign persons often use a form in the W-8 series instead, depending on their status and payment type.
What Information Appears on Form W-9?
| Section | What it identifies |
|---|---|
| Name | The individual or entity associated with the taxpayer identification number |
| Business name | A business or disregarded-entity name when different from the name above |
| Federal tax classification | How the person or entity is classified for federal tax purposes |
| Address | Mailing information for the taxpayer |
| TIN | Generally an SSN, EIN, or another permitted taxpayer identification number |
| Certification | Statements concerning the TIN, backup withholding, U.S. person status, and certain FATCA information |
What Is Backup Withholding?
Backup withholding is federal income tax withholding that can apply to certain reportable payments when required tax information is missing or incorrect or when the IRS has notified the taxpayer that backup withholding applies.
Form W-9 includes a certification concerning backup withholding status. Taxpayers notified by the IRS that backup withholding currently applies may need to modify that certification according to the form instructions.
W-9 vs. Form 1099
W-9 is an information-request form. Form 1099 is an information return used to report specified payments or transactions to the IRS and, generally, to the recipient.
Businesses may request a W-9 before paying a contractor and later use that information when preparing an applicable Form 1099. Receiving or completing a W-9 does not by itself guarantee that a particular 1099 will be required.
Does a W-9 Mean You Are Self-Employed?
Not automatically. W-9 is used in many contexts beyond independent contracting, including financial accounts and other reportable transactions.
When compensation is paid for nonemployee work, however, the worker may need to plan for taxes that are not withheld like ordinary W-2 wages. An irregular-income budget should separate tax money from spendable cash when withholding does not cover the expected liability.
When Should Form W-9 Be Updated?
Submitting a new W-9 can be appropriate when information previously provided to the requester changes, such as a name, TIN, tax classification, exemption status, or other information covered by the form or its instructions.
Requesters can also ask for updated documentation as part of their compliance process. Always use the current IRS revision and instructions rather than copying an old form from a previous engagement.
Frequently Asked Questions (FAQs)
Do you send Form W-9 to the IRS?
Generally no. The person completing the W-9 gives it to the requester, which keeps the information for applicable reporting and compliance purposes.
Is a W-9 the same as a 1099?
They serve different purposes: a W-9 provides taxpayer information to a requester, while a 1099 reports a qualifying payment or transaction.
Can an employee be asked to complete Form W-9 for wages?
Ordinary employee wage withholding is generally handled through Form W-4 and payroll reporting rather than Form W-9.