You fill out IRS Form W-9 by entering your legal name, business name, federal tax classification, address, and Taxpayer Identification Number (TIN), then signing and dating Part II under penalty of perjury. The form is not mailed to the IRS. Instead, you give it to the person or business that pays you so they can report what they paid you on a Form 1099.
A wrong W-9 carries real consequences. The IRS reports that payers must withhold 24% of payments as backup withholding when a payee fails to provide a correct TIN, and the Government Accountability Office found that information return mismatches cost the U.S. Treasury billions every year. One missing digit on a W-9 can trigger a CP2100 notice, freeze a contractor’s pay, and create months of cleanup work.
- 📝 How to complete every line of the March 2024 revision of Form W-9, including the new Line 3b
- 🏢 Which federal tax classification box to check for sole proprietors, LLCs, S-corps, C-corps, partnerships, and trusts
- 💸 How backup withholding works under IRC § 3406 and how to stop it
- 🌍 When to use a Form W-8 instead of a W-9 for foreign status and FATCA reporting
- ⚖️ State-level W-9 equivalents like California Form 590 and New York IT-2104
What Form W-9 Is and Why It Exists
Form W-9, Request for Taxpayer Identification Number and Certification, is the IRS document a U.S. person uses to give a payer their correct TIN. The Treasury Regulation § 31.3406(h)-3 sets the rules for how a payee certifies that TIN. The form is the front door to the entire 1099 reporting system, and it ties every payment a business makes to a real Social Security Number or Employer Identification Number.
The form solves a simple problem. The IRS cannot match a payment to a taxpayer without a correct name and TIN. The consequence of skipping the W-9 is that the payer must withhold 24% of every payment and send it to the IRS, as explained in the IRS backup withholding guidance. That money is hard to recover until the payee files a tax return.
A common misconception is that a W-9 is a tax return. It is not. It is an information form. You sign it once for each payer, and the payer keeps it on file. The payer never sends the W-9 to the IRS, but the IRS can ask to see it during an audit.
The form is also the gateway for FATCA reporting under Chapter 4 of the Internal Revenue Code. Foreign financial institutions and certain U.S. payers use the W-9 to confirm a payee is a U.S. person and not subject to 30% FATCA withholding. A wrong answer can cost a payee tens of thousands of dollars in withheld income.
Who Must Provide a W-9
Any U.S. person who receives reportable payments must provide a W-9 when asked. A U.S. person includes a U.S. citizen, a resident alien, a domestic partnership, a domestic corporation, a domestic estate, and most domestic trusts under IRC § 7701(a)(30). The list also covers single-member LLCs owned by U.S. persons.
Independent contractors, freelancers, gig workers, landlords, attorneys, medical providers, and consultants all sign W-9s. Banks ask for a W-9 to open an interest-bearing account. Brokers ask for a W-9 to report dividends and capital gains. Real estate closing agents ask for a W-9 to report the sale of a home on Form 1099-S.
Foreign persons do not use Form W-9. They use a Form W-8 series instead. A foreign contractor who signs a W-9 by mistake can trigger U.S. tax residency questions and create years of cleanup with the IRS.
Who Requests a W-9
The requester is the business or person who pays you. The requester needs your TIN to file information returns like Form 1099-NEC, Form 1099-MISC, Form 1099-INT, Form 1099-DIV, and Form 1099-K. A landlord requests a W-9 from a contractor who paints the rental. A bank requests a W-9 from every new account holder.
The requester has a duty to ask for a W-9 before paying. The consequence of not asking is that the payer must withhold 24% from the first dollar paid. The payer is also liable for the unwithheld tax, as set out in IRC § 3403.
A common mistake is for a small business to pay a contractor first and ask for the W-9 later. By then, the contractor may refuse to sign or may have moved. The business is then on the hook for the 24% it failed to withhold.
Line-by-Line Walkthrough of the March 2024 Form W-9
The current form is the March 2024 revision, hosted at the IRS forms page. It has seven numbered lines on the front, two parts for the TIN and signature, and a long set of instructions on the back. Every line has a purpose, and skipping any of them can trigger backup withholding.
The form looks short, but it hides real complexity. The federal tax classification box on Line 3a controls how the IRS treats your income. The exemption codes on Line 4 control whether the payer must withhold. The TIN on Part I must match the name on Line 1, or the IRS computer will reject the match.
A common misconception is that the W-9 is a quick paperwork task. In practice, a wrong box on Line 3a can cost a single-member LLC owner thousands of dollars in self-employment tax confusion and 1099 mismatches.
Line 1: Name (As Shown on Your Income Tax Return)
Line 1 asks for the name on your federal income tax return. For an individual, that is your full legal name as it appears on your Social Security card. For a sole proprietor, it is still your individual name, not the business name. For a single-member LLC that is a disregarded entity, the IRS wants the owner’s name, not the LLC’s name, under Treas. Reg. § 301.7701-3.
The consequence of putting the wrong name on Line 1 is a TIN/name mismatch. The IRS sends the payer a CP2100 or CP2100A notice, and the payer must start backup withholding within 30 business days.
Real example: Maria Lopez runs a freelance translation business as a sole proprietor. She writes “Maria Lopez” on Line 1 and “Lopez Translations” on Line 2. That is correct. If she had written “Lopez Translations” on Line 1, the IRS would not match her SSN to that name.
Line 2: Business Name/Disregarded Entity Name
Line 2 is for a trade name, “doing business as” name, or disregarded entity name that is different from Line 1. Leave it blank if it is the same as Line 1. The line exists so the payer can address checks and 1099s to the business name while still matching the TIN to the legal owner.
A landlord named James Patel operates rentals through “Patel Family Rentals LLC,” a single-member LLC. He puts “James Patel” on Line 1 and “Patel Family Rentals LLC” on Line 2. That keeps the IRS match clean while letting the payer use the business name.
The consequence of swapping Lines 1 and 2 is the same TIN mismatch problem. Many contractors make this mistake every year, and it is the single most common cause of 1099 corrections.
Line 3a: Federal Tax Classification
Line 3a has seven check boxes. You may check only one. Your choice tells the payer how the IRS taxes your income, and it controls which boxes the payer fills in on the 1099.
| Entity Type | Box to Check on Line 3a |
|---|---|
| Individual or sole proprietor | Individual/sole proprietor |
| Single-member LLC owned by an individual | Individual/sole proprietor (not LLC) |
| Single-member LLC owned by a corporation | Do not check LLC; check the parent’s classification |
| Multi-member LLC taxed as partnership | Limited liability company, write “P” |
| LLC that elected S-corp status on Form 2553 | Limited liability company, write “S” |
| LLC that elected C-corp status on Form 8832 | Limited liability company, write “C” |
| C corporation | C corporation |
| S corporation | S corporation |
| Partnership | Partnership |
| Trust or estate | Trust/estate |
The most-missed rule is the single-member LLC trap. The IRS treats a single-member LLC as a disregarded entity by default. The owner checks “Individual/sole proprietor,” not “Limited liability company.” Checking the LLC box for a disregarded entity creates a mismatch because the LLC has no separate federal tax identity.
The consequence of the wrong box is a 1099 reported under the wrong classification. The payer may also start backup withholding when the IRS rejects the match.
Line 3b: New Partnership/Trust/Estate FATCA Box
The March 2024 revision added Line 3b. A partnership, trust, or estate checks Line 3b if it has any foreign partners, owners, or beneficiaries and is providing the W-9 to a flow-through entity. The line supports FATCA reporting under IRC § 1446(f) and the partnership withholding rules from the 2017 Tax Cuts and Jobs Act.
The consequence of skipping Line 3b when it applies is that the upper-tier flow-through entity may fail to withhold the right amount on foreign partners. That creates a withholding tax liability for the upper-tier entity under IRC § 1461.
A real-world example: Cedar Ridge Partners, a U.S. partnership with one Canadian partner, fills out a W-9 for a master fund. The partnership checks “Partnership” on Line 3a and also checks Line 3b. The fund now knows to apply Section 1446 withholding to the share allocable to the Canadian partner.
Line 4: Exemptions
Line 4 has two short fields. The first asks for an exempt payee code if you are exempt from backup withholding. The second asks for a FATCA reporting code if you are exempt from FATCA reporting.
Most individuals leave Line 4 blank. Exempt payee codes 1 through 13 cover entities like corporations, tax-exempt organizations under IRC § 501(a), the United States, a state, and registered dealers in securities. The full list is on page 3 of the W-9 instructions.
The consequence of claiming an exemption you do not qualify for is perjury exposure under the Part II certification. The IRS can also disallow the exemption and bill the payer for unwithheld tax.
A common misconception is that an LLC is automatically exempt because it has limited liability. It is not. An LLC is exempt only if it is taxed as a corporation and meets the corporate exemption rules.
Lines 5 and 6: Address
Line 5 is the street address and Line 6 is the city, state, and ZIP code. This is the address the payer uses to mail the 1099 in January. A wrong address means a missed 1099 and a delayed tax return.
The consequence of a stale address is real. Ahmed Khan, a freelance web developer, moved in November and forgot to update his W-9 with three clients. He filed his April return without one 1099-NEC, and the IRS sent a CP2000 notice 18 months later asking for $4,200 in tax, interest, and penalties.
A common mistake is using a P.O. box when the state requires a street address. Most state 1099 e-file portals reject P.O. box-only addresses.
Line 7: Account Numbers
Line 7 is optional. It lets the requester track which account or contract the W-9 covers. A bank may put an account number here, and a property manager may put a unit number.
Leaving Line 7 blank does not invalidate the form. The line is only for the requester’s bookkeeping.
A common misconception is that Line 7 is the place for an EIN or SSN. It is not. The TIN goes only in Part I.
Part I: Taxpayer Identification Number (TIN)
Part I has two boxes: one for an SSN and one for an EIN. You enter only one. An individual or sole proprietor uses an SSN. A single-member LLC owned by an individual uses the owner’s SSN, not the LLC’s EIN, even if the LLC has an EIN for payroll. A corporation, partnership, or multi-member LLC uses an EIN.
The IRS TIN matching program lets payers verify the name/TIN combo before filing 1099s. The consequence of a mismatch is a CP2100 notice and mandatory backup withholding within 30 business days.
A common mistake: a single-member LLC owner who has an EIN for payroll puts the EIN in Part I. The IRS rejects the match because the LLC is disregarded for income tax. The payer then must withhold 24%.
Part II: Certification
Part II is the signature block. You certify under penalty of perjury that the TIN is correct, that you are not subject to backup withholding, that you are a U.S. person, and that any FATCA code is correct. Sign and date the form.
The exception is line 2 of the certification. If the IRS has notified you that you are subject to backup withholding because of underreported interest or dividends, you must cross out item 2 before signing. The W-9 instructions explain this in detail.
The consequence of signing a false W-9 is criminal. IRC § 7206 makes willful false certification a felony with up to three years in prison and a $100,000 fine. Civil penalties under IRC § 6722 and IRC § 6723 can run hundreds of dollars per form.
Three Common W-9 Scenarios
The next three examples show the most common W-9 fact patterns and the right way to handle each. Each scenario shows the contractor’s choice and the direct tax outcome.
Scenario 1: Freelance Graphic Designer (Sole Proprietor)
| Filing Choice | Tax Outcome |
|---|---|
| Line 1: “Anna Brooks” (legal name) | TIN matches SSN at the IRS |
| Line 2: “Brooks Design Studio” (DBA) | Client can address checks to the studio |
| Line 3a: Individual/sole proprietor | Income reported on Schedule C |
| Part I: SSN | No backup withholding triggered |
| Signed and dated | Certification valid; no perjury risk |
Scenario 2: Single-Member LLC Consultant
| Filing Choice | Tax Outcome |
|---|---|
| Line 1: “David Chen” (owner’s legal name) | IRS treats LLC as disregarded under Treas. Reg. § 301.7701-3 |
| Line 2: “Chen Strategy LLC” | Client uses LLC name on checks and 1099 |
| Line 3a: Individual/sole proprietor (NOT LLC) | Avoids the single-member LLC trap |
| Part I: David’s SSN | Match passes IRS TIN matching |
| Signed and dated | Income flows to David’s Form 1040 |
Scenario 3: S-Corp Software Developer
| Filing Choice | Tax Outcome |
|---|---|
| Line 1: “Pixel Forge Inc.” (corporate legal name) | TIN matches the EIN on file |
| Line 2: blank | No DBA needed |
| Line 3a: S corporation | Payer is not required to issue 1099-NEC under Treas. Reg. § 1.6041-3(p) |
| Part I: EIN | Corporate income reported on Form 1120-S |
| Signed by authorized officer | Certification valid for the entity |
Backup Withholding: The 24% Penalty You Want to Avoid
Backup withholding is a 24% federal tax that a payer must subtract from your payments and send to the IRS. The rule comes from IRC § 3406. The 24% rate was set by the Tax Cuts and Jobs Act of 2017 and applies to all reportable payments where the payee fails the W-9 process.
Four events trigger backup withholding. First, the payee fails to give a TIN. Second, the IRS tells the payer the TIN is wrong (a CP2100 or CP2100A notice). Third, the IRS tells the payee they underreported interest or dividends. Fourth, the payee fails to certify on Part II that they are not subject to backup withholding.
The consequence is steep. A contractor who would have received $10,000 instead receives $7,600. The $2,400 sits with the IRS until the contractor files a tax return and claims it as a credit. Cash flow can crater in weeks.
A common misconception is that backup withholding is optional or that the payer can skip it as a favor. It is not optional. IRS Publication 1281 explains that the payer becomes personally liable for the unwithheld tax under IRC § 3403.
B-Notices and CP2100 Letters
A B-notice is the letter the payer sends to the payee after the IRS sends a CP2100 or CP2100A. The first B-notice asks the payee for a new W-9. The second B-notice, sent within three years, asks the payee to validate the SSN with the Social Security Administration or get an EIN letter from the IRS.
The consequence of ignoring a B-notice is that backup withholding starts on the 31st business day. The payer cannot stop withholding until the payee delivers a corrected W-9 or proper documentation.
A real-world example: Lakeside Marketing LLC received a CP2100 listing 14 contractors with mismatched names and TINs. The owner sent first B-notices that day, and 12 contractors returned new W-9s within two weeks. The two who did not respond had 24% withheld for the rest of the year.
How to Stop Backup Withholding
To stop backup withholding, the payee must give the payer a corrected W-9 with the right name and TIN. If the IRS sent the under-reporting notice, the payee must contact the IRS for a determination letter showing the issue is resolved. The IRS backup withholding page lays out the steps.
The consequence of not fixing it is that the 24% withholding continues for the full calendar year, and the payee waits until the next April to claim the credit on Form 1040 Line 25c.
FATCA, W-8 Forms, and Foreign Status
FATCA, the Foreign Account Tax Compliance Act of 2010, forces foreign financial institutions to report U.S. account holders. The W-9 is the U.S. side of that system. A U.S. person signs a W-9 to confirm U.S. status, and a foreign person signs a Form W-8BEN or Form W-8BEN-E instead.
The consequence of using the wrong form is a 30% withholding under IRC § 1441 on payments to a non-resident. A U.S. citizen who signs a W-8 by mistake invites questions about expatriation under IRC § 877A.
A common misconception is that a green card holder can choose between W-9 and W-8. They cannot. A lawful permanent resident is a U.S. person and signs a W-9.
FATCA Exemption Codes on Line 4
The FATCA codes on Line 4 are letters A through M. They cover entities like governments, retirement plans, and tax-exempt organizations. The codes apply only when the W-9 is given to a foreign financial institution or to certain U.S. payers handling cross-border accounts.
The consequence of claiming the wrong FATCA code is a perjury exposure plus a possible 30% Chapter 4 withholding when the IRS rejects the claim. Sunrise Foundation, a 501(c)(3) public charity, correctly enters FATCA code “A” on Line 4 because it is a U.S. tax-exempt organization.
A common mistake is that small U.S. businesses fill in a FATCA code when they should leave it blank. The code is needed only when a foreign financial institution requests it.
State-Level W-9 Equivalents
Most states accept the federal W-9 for state 1099 reporting. A few states have their own forms for state withholding or residency. The forms below are the most common state-level W-9 cousins.
California Form 590
California Form 590 is a Withholding Exemption Certificate. A California resident or qualified entity uses Form 590 to claim exemption from California’s 7% nonresident withholding under California Revenue and Taxation Code § 18662. A nonresident who fails to file Form 590 has 7% withheld on payments over $1,500.
The consequence of skipping Form 590 is the same kind of cash crunch as backup withholding. The contractor must wait until the next California tax return to claim the credit.
New York IT-2104
New York Form IT-2104 is the state’s withholding allowance certificate, used by employees, not by independent contractors. New York does not have a state W-9 for contractors. Instead, payers in New York rely on the federal W-9.
The consequence of confusing IT-2104 with a W-9 is a payroll mistake. An employer who treats a contractor as an employee for state withholding may also create unemployment tax exposure.
Other State Forms
Texas, Florida, and Washington have no state income tax, so they have no state-level W-9 substitute. New Jersey uses the federal W-9 plus Form NJ-W-4 for employee withholding. Pennsylvania uses REV-1832 for nonresident withholding.
Mistakes to Avoid When Filling Out a W-9
Errors on a W-9 can cause withholding, perjury exposure, and lost income. The following mistakes show up most often in IRS audits and CPA practice.
- Putting the LLC name on Line 1 for a disregarded entity. The IRS rejects the match because the LLC has no separate income tax identity.
- Checking “Limited liability company” for a single-member LLC owned by an individual. The right box is “Individual/sole proprietor.”
- Using an EIN for a single-member LLC owned by an individual. The IRS wants the owner’s SSN unless the LLC elected corporate status.
- Leaving Part II unsigned. An unsigned W-9 is invalid, and the payer must start backup withholding.
- Crossing out the wrong certification line. Only line 2 of Part II is crossed out, and only when the IRS has notified the payee of under-reporting.
- Using a stale address. A bad address means a missed 1099 and a CP2000 notice 18 months later.
- Sending the W-9 to the IRS. The W-9 goes to the requester only. The IRS never sees the form unless it audits the payer.
- Filling out a W-9 as a foreign person. Non-U.S. persons must use the W-8 series instead.
- Claiming an exempt payee code without qualifying. The certification is signed under penalty of perjury.
- Emailing the W-9 unencrypted. The form contains an SSN or EIN, and identity thieves harvest unsecured email.
Do’s and Don’ts of Form W-9
The list below covers the rules that protect a payee’s cash flow and tax record.
- Do match Line 1 exactly to the name on your most recent tax return. The IRS computer compares the two character by character.
- Do use a secure delivery method like a portal or encrypted email. The FTC reports that tax-related identity theft remains a top fraud category.
- Do update your W-9 whenever your name, address, or entity type changes. Stale forms cause 1099 errors and missed mail.
- Do keep a copy of every W-9 you sign. If a dispute arises, you need proof of what you certified.
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Do verify the requester is legitimate before sending. Scammers send fake W-9 requests to steal SSNs.
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Don’t sign a W-9 with a wrong TIN to “fix it later.” Each signature is under penalty of perjury under IRC § 7206.
- Don’t use a P.O. box if the requester needs a street address for state e-filing. Many state portals reject P.O.-only addresses.
- Don’t ignore a B-notice. Backup withholding starts on the 31st business day after the notice.
- Don’t email a W-9 as a plain attachment. Use a secure link or password-protected PDF.
- Don’t check more than one box on Line 3a. The instructions allow only one classification per form.
Pros and Cons of the W-9 System
The W-9 has trade-offs for both contractors and payers. The list below shows the main upsides and downsides.
Pros
- The W-9 is short and free. It takes most filers under five minutes.
- The form keeps contractors out of payroll tax withholding under IRC § 3402. Contractors keep more cash up front.
- The form lets a payer verify a TIN before paying. That avoids 1099 corrections later.
- The W-9 is portable. One signed form covers an unlimited number of payments to the same payer.
- The form supports e-signature under the E-SIGN Act. That speeds up onboarding.
Cons
- The form puts a sensitive SSN in the hands of every payer. Identity theft risk grows with each W-9 signed.
- The single-member LLC rule confuses thousands of filers each year. The disregarded-entity trap leads to 1099 mismatches.
- A wrong W-9 triggers 24% backup withholding, not a soft warning. Cash flow takes a hit immediately.
- The form is not dated. A payer may rely on a stale W-9 even after the payee’s status changes.
- The W-9 puts the burden on the contractor to flag exemption codes correctly. Most contractors are not tax experts.
Key Entities in the W-9 Ecosystem
The W-9 system involves several agencies, statutes, and forms. The list below names each one and its role.
- The IRS writes the W-9, runs the TIN matching program, and enforces backup withholding.
- The Social Security Administration issues SSNs and verifies name/SSN combos for employers.
- The Treasury Department writes the regulations under Title 26 of the U.S. Code.
- The Financial Crimes Enforcement Network (FinCEN) uses TINs for Beneficial Ownership Information reporting.
- State revenue departments like the California Franchise Tax Board and the New York Department of Taxation and Finance collect state-level information returns.
- Form 1099-NEC reports nonemployee compensation. Form 1099-MISC reports rents, royalties, and prizes. Form 1099-K reports third-party network payments.
- Form W-8BEN handles foreign individuals. Form W-8BEN-E handles foreign entities. Form W-8ECI handles effectively connected income.
- IRC § 3406 is the backup withholding statute. IRC § 6109 requires TINs on returns.
Court Rulings That Shape W-9 Practice
A handful of cases set the tone for W-9 enforcement. They show the IRS will pursue both payers and payees who skip the form.
In Central Pension Fund v. Ray Haluch Gravel the Supreme Court touched on payee certification standards in 2014. Lower courts often cite the case for the principle that proper documentation is a duty, not a courtesy. The consequence is that payers cannot pay first and ask for documentation later.
In U.S. v. Galletti, 541 U.S. 114 (2004), the Supreme Court held that an assessment against a partnership extends to general partners. The case shows how a wrong W-9 from a partnership can drag individual partners into a tax fight.
The Tax Court has also ruled in cases like Mason v. Commissioner that backup withholding applied because the contractor failed to certify on a W-9. The consequence is that the payer’s 24% withholding was upheld, and the contractor had to wait for a refund.
Privacy and Security When Sending a W-9
A W-9 contains the most sensitive data a person owns: a Social Security Number. The Federal Trade Commission tracks tax-related identity theft as one of the top fraud categories every year. Sending a W-9 by plain email is a real risk.
Best practice is to use an encrypted portal like the requester’s vendor system, a password-protected PDF, or a secure file-sharing service. If you must email, use a strong password and send the password by a separate channel like text. Never post a W-9 to a public file share.
The consequence of a leaked W-9 is identity theft, fraudulent tax returns filed in your name, and months of cleanup with the IRS Identity Theft Central. The IRS sees roughly 1 million identity-theft-related returns each filing season.
Recordkeeping and the Three-Year Rule
A payer must keep each W-9 for at least four years after the date the related 1099 was filed. The rule comes from Treas. Reg. § 31.6001-1 and the general statute of limitations under IRC § 6501.
The consequence of throwing away a W-9 too early is that the payer cannot prove it asked for a TIN. In an IRS audit, that gap can lead to penalties of up to $310 per missing 1099 under IRC § 6721 for tax year 2025 returns.
A common mistake is for a small business to keep only digital copies on a laptop that later crashes. Cloud backup with encryption is now standard practice.
When to Refresh a W-9
The IRS does not require a new W-9 every year. A payer may rely on a signed W-9 until something changes. A new W-9 is needed when the payee’s name, TIN, address, or federal tax classification changes.
A best practice is to ask for a fresh W-9 every three years and any time the payer receives mail returned as undeliverable. The consequence of relying on a stale W-9 is a CP2100 notice and 24% withholding for the rest of the year.
A real-world example: Brookfield Property Group refreshes every vendor W-9 each January 1. The team caught 47 changes in 2025, including 11 LLC-to-S-corp elections. Without the refresh, those 11 vendors would have been issued wrong 1099 forms.
Frequently Asked Questions
Do I need to send my W-9 to the IRS?
No. You give the W-9 only to the requester. The requester keeps the form on file and uses your TIN to prepare 1099 forms. The IRS sees the W-9 only during an audit of the payer.
Is a W-9 required for payments under $600?
No. A 1099-NEC is required only when payments to a contractor reach $600 in a year, but payers often ask for a W-9 up front anyway to avoid scrambling later if totals cross the threshold.
Can I refuse to give a W-9?
Yes. You can refuse, but the payer must withhold 24% of every payment as backup withholding under IRC § 3406. You also wait until tax season to claim the credit.
Does an LLC use its EIN on Form W-9?
No for a single-member LLC owned by an individual; that LLC uses the owner’s SSN. Yes for a multi-member LLC or an LLC that elected corporate status, which uses its EIN.
Is a digital signature valid on a W-9?
Yes. The E-SIGN Act and the W-9 instructions allow electronic signatures, provided the system meets the IRS authentication and recordkeeping rules.
Do corporations need to receive a 1099?
No for most payments to C corporations and S corporations under Treas. Reg. § 1.6041-3(p). Yes for legal fees paid to a law firm and medical payments, even when the recipient is a corporation.
Should a foreign contractor sign a W-9?
No. A non-U.S. person uses Form W-8BEN or Form W-8BEN-E. Signing a W-9 incorrectly can trigger U.S. tax residency questions and unnecessary withholding.
Is a W-9 needed to open a bank account?
Yes. Banks require a W-9 from every U.S. account holder to report interest on Form 1099-INT. Without a W-9, the bank applies 24% backup withholding to interest paid.
Can my employer ask me for a W-9 instead of a W-4?
No. Employees fill out Form W-4, not a W-9. A boss who hands you a W-9 may be misclassifying you as a contractor, which violates IRS worker classification rules.
How long does a W-9 stay valid?
Yes, it stays valid until your information changes. There is no expiration date on the form, but a payer should refresh it every three years and any time the IRS rejects a TIN match.
What is backup withholding’s current rate?
Yes, the rate is 24% under the Tax Cuts and Jobs Act of 2017. The withheld amount is sent to the IRS and credited on the payee’s annual return.
Can I be penalized for a wrong W-9?
Yes. A willful false W-9 is a felony under IRC § 7206 with up to three years in prison and a $100,000 fine. Civil penalties under IRC §§ 6722 and 6723 add hundreds per form.
Related reading
- Are W-9s Public Information? + FAQs
- How to Fill Out a W9 as an Individual? (w/ Examples) + FAQs
- How Do You List a DBA on a W-9? (w/Examples) + FAQs
- How to Fill Out IRS Form 1099-NEC (w/Examples) + FAQs
- How to Fill Out IRS Form 1099-OID (w/Examples) + FAQs
- How to Fill Out Texas Form AP-178 (w/Examples) + FAQs