Using IRS Tax Form W-9

The IRS tax form W-9 is used for domestic persons or businesses, US resident aliens, and a small number of other designations, mainly as a record-keeping document for business exchanges that result in reportable income for a hired person or business. For example, it is commonly used for non-employee compensation, dividends or interest. Employers of freelancers and independent contractors commonly request a W-9 from the contracted, generally completed and submitted at contract signing. It is an official request for identifying information for tax reporting purposes and should be resubmitted if the information it contains changes. The form does not have an expiration date, so updates are as needed, although it is not uncommon for an employer to request that a new form be filled out each year to ensure accuracy. 

Information Requested

The information on form W-9 is basic identifying information of a person or business:

  • Name and business name–If there is not a business name, leave the field blank.
  • Type of business–Check the box that applies and read the instructions for "other" if there is a question of belonging to any other category.
  • Accounts–Filling in this space is not always required; it generally applies to recipients of interest and other income and is not applicable for most contracted work.
  • Requestor’s information–Fill this in if you have access to this information; again, this is not required.
  • The SSN or EIN–The identification number corresponding to the individual or person whose information is on the form is required.

When filling in this information, it is best to read the attached instructions. Incorrect information, however minor the errors, may result in backup withholding. Information error penalties are explained in the instructions. No witness is needed to accompany the required signature in completion of this document.

Who Is Responsible for The Income?

It is important to note that the form does not in itself initiate withholding from payments. Furthermore, it is the responsibility of the recipient of the funds to report and pay the appropriate taxes on the entire income received. 

Who Submits the Form to The IRS?

This form is not filed with the IRS. The employer requests that the contractor complete and then return the form. The hiring company then will use the information entered on form W-9 to complete a 1099-MISC, which essentially reports the accounts payable of the company, not including employee wages or salaries.  

What If There Is a Mistake?

Accuracy is valuable when completing this form. If any inaccuracies or conflicting information is detected, the person or business on the form may be subject to backup withholding until the data has been corrected. If you are subject to this withholding, you will be notified by the IRS, and 28 percent of the income will be ordered held. If backup withholding is not required, simply check off the “Exempt Payee” option.