What Is a W-9? Definition and Who Fills It Out

Form W-9 is an IRS document that businesses use to collect an tax identification number (TIN). Independent contractors who were paid at least $600 during the year need to fill out a W-9.

There are a few other situations in which a business may request a completed Form W-9. Examples include mortgage interest payments, IRA contributions, dividend income, real estate transactions and proceeds from investment sales^[0]

Workers with W-9 status don’t usually have income taxes withheld from their payments. Instead, an independent contractor’s clients report payments to the IRS, and it’s up to the worker to settle up, usually through quarterly estimated tax payments. (A notable exception: Some independent contractors’ payments may be subject to backup withholding if they’ve had tax issues.)

Among the people who might have to fill out W-9 forms are independent contractors, gig workers, freelancers and anyone else who is paid outside an employer/employee relationship.

In most cases, the IRS says a business should ask for a W-9 form if it is paying an independent contractor who meets the following criteria:

1. The worker is not an employee.

2. The payment is part of your business.

3. The annual value of the payments is at least $600.

At the end of the year, businesses are expected to tally up their payments to W-9 workers and report them to the IRS and the contractors, usually on Form 1099-NEC.

The principal piece of information that businesses collect on a Form W-9 is the tax identification of whomever they’re paying. This can be a Social Security number or individual taxpayer identification number (in some cases, it can also be an employer identification number)^[0]

Here is some other information a taxpayer may have to provide on Form W-9:

• Full name.

• Address.

• Tax classification (sole proprietorship, LLC, partnership, etc.).

• Any tax reporting exemptions^[0]

  Internal Revenue Service. About Form W-9, Request for Taxpayer Identification Number and Certification. Accessed Sep 14, 2023.

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Source: IRS. Access a downloadable, blank W-9.

The IRS published an updated version of the W-9 form in March^[0]

Businesses use W-9 forms to collect taxpayer identification numbers for nonemployees who work for them during the year. They can then use these TINs to help them fill out 1099 forms at the end of the year.

» MORE: What is a 1099, and how does it work?

What is backup withholding?

Backup withholding requires businesses to put aside advance taxes for people who have had certain tax issues. These problems include not providing an accurate tax ID or failure to report interest or dividend income. The backup withholding rate is 24%.

» Dive deeper: How backup withholding works

The main difference between Form W-9 and Form W-4 is that Form W-9 is for independent contractors and other payments to people who are not employees, while Form W-4 is for more traditional employment relationships.