What Is a W-9? Definition and Who Fills It Out
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What is a W-9?
Form W-9 is an IRS document that businesses use to collect a person's tax identification number (TIN). Independent contractors who were paid at least $600 during the year need to fill out a W-9.
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.)
A business or other entity may also request a completed Form W-9 in a few other situations. Examples include mortgage interest payments, IRA contributions, dividend income, real estate transactions, and proceeds from investment sales.
Who is required to fill out a W-9?
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:
The worker is not an employee.
The payment is part of your business.
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.
How to fill out a W-9: A step-by-step guide
The principal piece of information that businesses collect on a Form W-9 is the tax identification number of whomever they’re paying. This can be a Social Security number, or in some cases, it can also be an employer identification number.
But that's not the only information you need to provide on a W-9. Here's a breakdown of what each section on the W-9 means and how to fill it out.
W-9 form 2024
The IRS published an updated version of the W-9 form in March 2024. The revised W-9 adds a new line 3b for those who choose "partnership" or "trust/estate," asking them to indicate whether the partnership, trust or estate has foreign partners, beneficiaries or owners.
What is a W-9 form used for?
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.
If you get a 1099 form in the mail, a copy is also sent to the IRS. So be sure to accurately report any payments you received during the year when filling out your tax return.
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
Form W-9 vs. W-4
The main difference between Form W-9 and Form W-4 is that Form W-9 is for independent contractors and other people who are not employees, while Form W-4 is for more traditional employment relationships.
Though a lot of the information these forms collect is similar, they represent different types of business relationships. Notably, Form W-4 requests information used to calculate tax withholding.
