W-9 Instructions: How to Fill Out a W-9 Form

As your business expands beyond borders and boundaries, chances are you’ve explored hiring independent contractors. While full-time employees fill out a Form I-9, independent contractors, known as 1099 workers in the U.S., need to fill out a form W-9.

What is a W-9 Form? What is it used for? How should independent contractors fill out a W-9 Form? Navigating the complexities of global employment compliance isn’t easy, but with the guidance and expertise of a best-in-class Employer of Record (EOR), it can be.

What is a W-9 Form?

A W-9 Form, also called a Request for Taxpayer Information Number and Certification, is a tax document by the U.S. Internal Revenue Service (IRS). A W-9 form is typically used by businesses and individuals who need to request a Taxpayer Identification Number (TIN) from another party for tax purposes.

A TIN is used to identify individuals or companies that can be taxed within the United States. An Employer Identification Number (EIN) is a type of TIN used to identify companies, while a Social Security Number (SSN) is used for individuals.

A W-9 Form applies to:

• Income
• Real estate transactions
• Mortgage interest
• Acquisition or abandonment of secured property
• Cancellation of debt
• Contributions made to an IRA

The most common use is when a company needs to collect information from an independent contractor or freelancer to report specific payments to the IRS for services rendered. Additionally, financial institutions may also use W-9 forms to verify the identity of account holders.

Where to get a form W-9

You can easily download a Form W-9 directly from the official website of the Internal Revenue Service (IRS). Many financial institutions and businesses may also provide the option to fill out a W-9 form electronically through one of their online platforms.

With G-P Contractor, companies can not only engage and pay contractors in 180+ countries, quickly and easily, but also manage online paperwork including request for taxpayer identification number and certification.

Additionally, if you have any questions, G-P Gia™ can help. Our AI-based HR compliance advisor can offer detailed insights on employment laws, tax regulations, and benefits in over 50 countries and all 50 U.S. states.

Who is required to fill out a W-9?

Any individual or entity who receives payments for services rendered — or goods sold — may need to submit a W-9 form to the payer. This includes, but is not limited to, independent contractors, freelancers, vendors, sole proprietors, partnerships, LLCs, corporations, trusts, estates, and even individuals receiving rental income.

In general, there are four key circumstances during which a company might collect a W-9 form from an individual:

1. The company hires an independent contractor. Perhaps the most common use of the W-9 tax form is to collect information about a freelancer, independent contractor, or self-employed individual. For example, if you leverage G-P Contractor to hire and pay contractors for a graphic design project or bring on self-employed business consultants, you can ask them to provide a completed W-9 form before they begin work.
2. The company is a bank, and a customer opens a new bank account. Banks often need to submit information to the IRS about their customers, such as the amount of interest earned during the year. For that reason, a bank might request a W-9 from a new customer. Some banks don’t request the form but do ask customers to provide information, such as their Social Security Number (SSN), when they open an account.
3. A lender has handled a debt. If a person has a loan with a lender and the lender cancels the debt, the canceled debt is often considered taxable income. The lender will need to provide information to the IRS and will likely ask the person to submit a Form W-9 to obtain it.
4. The company is an investment firm. Similarly to banks, investment firms will often request a Form W-9 from clients so it can provide the IRS with details about any dividends or gains earned by the investor.

Remember: Correctly classifying workers is key to remaining compliant. A company typically withholds income tax from full-time employees, whereas independent contractors are responsible for paying their own taxes directly to the tax authorities.

How to fill out a W-9 Form

Contractors must fill out a W-9 form accurately to ensure compliance. Although the form comes from the IRS and is used to collect taxpayer information, individuals don’t submit the form to the IRS. Instead, your company should keep it on file and use it to fill out any informational tax forms, such as 1099 Forms (also known as Form 1099-NEC).

W-9 Instructions: How to Fill Out a W-9 Form
Step 1: State name or business name.
Step 2: Specify the type of business.
Step 3: Select the federal tax classification.
Step 4: Add TIN.
Step 5: Enter address.
Step 6: Certify the form.
Step 7: Submit the form.

1. State name or business name.

Form W-9 asks for the taxpayer’s name, as it appears on the individual’s tax return. If self-employed individuals or sole proprietors are completing the form, filling out line 1 is simple: They just have to put their name on the line as it appears on their tax return.

If a person is filling out the form for a partnership, limited liability company (LLC), or another type of corporation, the individual should put the name of the legal entity on line 2. For example, a partnership or single-member LLC would put its “doing business as” name here.

2. Specify the type of business.

If the contractor operates under a specific business name, they should enter it on the “Business name” line.

3. Select the federal tax classification.

The contractor should check the relevant box for tax classification. Some options include individual/sole proprietor, C corporation, S corporation, partnership, trust/estate, or limited liability company.

4. Add TIN.

Contractors should add their Social Security Number (SSN) if they’re an individual or sole proprietor.

If they’re a business, then an Employer Identification Number (EIN) applies. It might be the case that individuals filling out a W-9 don’t yet have a Tax Identification Number (TIN). Depending on their citizenship or entity status, they can apply for a TIN and write “applied for” in Part I of the W-9. They will be subject to backup withholding until they receive their TIN and submit an updated W-9 to the payer.

5. Enter address.

Next, the contractor should enter their address on the “Address” line. This should be the address associated with their TIN.

6. Certify the form.

The worker should sign and date the form in the designated areas to certify that the information provided is accurate.

7. Submit the form.

The completed form W-9 should be sent to the requestor who needs it for tax reporting purposes.

To avoid any issues with tax reporting or payments, it’s essential to guarantee that all information provided on the form W-9 is accurate and matches the IRS records.

What is Part I of the W-9 form?

Part I is where individuals filling out the W-9 enter their TIN. The number depends on who is filling out the form. Sole proprietors can use their Social Security Number (SSN) or their Employer Identification Number (EIN) if they have one. Other types of entities should use their EIN.

Some people might not have an SSN or an EIN. For example, resident aliens might not be eligible for an SSN. If that’s the case, they should provide their individual tax identification number (ITIN) from the IRS.

What is Part II of the W-9 form?

Part II of Form W-9 is used for certifications related to backup withholding. Backup withholding may be required in certain situations where the IRS mandates that a payer withhold taxes from payments made to a payee. For instance, if the payee fails to provide a correct TIN or fails to certify the TIN.

In Part II of the W-9 form, the payee will sign and date the form to declare the information provided is accurate. If the payee is subject to backup withholding for failing to report all interest and dividends on their tax return, they must cross out Item 2 in the certification before signing the form.

Is there a deadline to collect a W-9 form?

No. Since the IRS doesn’t collect Form W-9, there’s no firm deadline; however, it is best practice to collect a completed W-9 prior to making any payments to your contractor. It’s a way for your company to efficiently and accurately collect information about taxpayers. You might find it easiest to have professionals submit the form to you when they sign a contractor agreement before they begin working on a project.

While there’s no deadline for a W-9, there is a deadline for Form 1099. Your company needs to send Form 1099-NEC to contractors by the end of January following the tax year. For that reason, you might want to have contractors send in their W-9 to you before the end of the year, so you have plenty of time to prepare Form 1099-NEC for the IRS.

Engage and pay contractors with G-P today.

Over 80% of business leaders report that finding skilled talent in their existing market is difficult. That’s why G-P offers a quick and compliant solution for companies of all sizes to hire global employees and contractors, without setting up new entities.

G-P’s industry-leading global employment products and EOR solutions enable you to hire, onboard, and manage global teams while providing a range of services to streamline international tax compliance. Powered by our proprietary knowledge base and data systems, our technology ensures you have the instant answers and expert insights to make informed decisions and expand compliantly in 180+ countries, without setting up new entities.

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