Form W-9

Form W-9 is one page. A U.S. company that is about to pay you asks for it, you write your name and your taxpayer number, you sign it, and you send it back to them. Nothing goes to the IRS. The form says so at the top of page 1: "Give form to the requester. Do not send to the IRS."

Because of that, founders treat the form as an administrative step. It is not. When you sign it you are making a statement about who you are. You are declaring that your taxpayer number is correct, that you are not subject to backup withholding, and that you are a U.S. person.

That last item is the reason this page exists. The entire U.S. reporting system splits in two here. U.S. persons file Form W-9. Foreign persons file a form in the W-8 family. If you sign the wrong one, the company paying you now holds a signed statement about you that is false, and their reporting to the IRS will be built on it.

What the form actually asks for

The IRS describes the purpose in one sentence: use Form W-9 "to provide your correct Taxpayer Identification Number (TIN) to the person who is required to file an information return with the IRS." The information return is usually a 1099. Tax Topic 307 lists the payments that get reported this way: contractor pay (Form 1099-NEC), payment card and platform payouts (1099-K), rents and royalties (1099-MISC), interest (1099-INT), dividends (1099-DIV), broker transactions (1099-B), and several others.

So the sequence is simple. The payer needs to file a 1099 about the money they sent you. To do that, they need your correct taxpayer number. They collect it with Form W-9. They keep the form. They do not send it anywhere.

The form asks for three things:

1. Your name and your federal tax classification. Individual, sole proprietor, C corporation, S corporation, partnership, LLC, and so on.
2. Your taxpayer identification number. For an individual that is usually a Social Security number. For a business it is usually an EIN.
3. Your signature under the certification. Part II of the form is made "Under penalties of perjury" and has four numbered items. You certify that the number shown "is my correct taxpayer identification number (or I am waiting for a number to be issued to me)"; that you are "not subject to backup withholding"; that "I am a U.S. citizen or other U.S. person"; and that any FATCA code you entered is correct. Item 3 is the one this page is about.

What happens if you do not give it

The payer does not get to shrug and pay you anyway. They have to start backup withholding at 24%.

Here is what 24% means in money. On a $10,000 invoice, the payer sends $2,400 to the IRS and $7,600 to you. The work is the same. The invoice is the same. The amount that reaches your bank is not.

The IRS lists four situations that trigger it:

• You do not give the payer your TIN in the required manner.
• The IRS notifies the payer that the TIN you gave is incorrect.
• The IRS notifies the payer to start withholding because you underreported interest or dividends on your tax return.
• You fail to certify that you are not subject to backup withholding for underreporting of interest and dividends.

Once it starts, the only way to stop it is to fix the cause. The IRS says you must "correct the reason you became subject to backup withholding in the first place," which can mean giving the payer the correct TIN, resolving the underreported income and paying what you owe, or filing the returns you never filed.

One note on the rate, because bad numbers circulate. It is 24%. Some older articles still say 28%. Use 24%.

🇺🇸 If the IRS counts you as a U.S. person

Form W-9 is your form. When a client, a marketplace, or a bank asks for one, you fill it in and send it back to them.

The instructions define a U.S. person as, among others, "an individual who is a U.S. citizen or U.S. resident alien." So there are two ways into this lane. If you are a U.S. citizen, you are in it wherever you live. If you are not a citizen, it depends on whether you are a resident alien, which is decided by the green card test or the substantial presence test. We cover those two tests on a separate page in this guide.

Entities work differently. A corporation or partnership organized in the United States is a U.S. person by virtue of where it was organized. A single-member LLC is the exception that matters here, because it is disregarded and the form follows its owner. More on that in the next section.

Three practical points.

The certification is a statement, not a checkbox. The form is explicit about one case: "You must cross out item 2 above if you have been notified by the IRS that you are currently subject to backup withholding because you have failed to report all interest and dividends on your tax return." Leaving item 2 in place and signing anyway does not stop the withholding. Fixing the underlying problem does.

Send a new W-9 when your details change. If you invoiced under your own Social Security number last year and you now invoice through an LLC with its own EIN, the payer is still holding the old form. Their 1099 will be issued against the old number. Give them a new W-9 before the payment, not in January when the 1099 arrives.

A W-9 is not a tax return. It reports nothing about how much you earned and it calculates no tax. It only tells the payer which number to write on the 1099 they file about you.

🌏 If it does not

Do not sign it. The instructions to Form W-9 are direct about this. Under "Purpose of Form": "Use Form W-9 only if you are a U.S. person (including a resident alien)." Under "Foreign person": if you are a foreign person, "do not use Form W-9. Instead, use the appropriate Form W-8 or Form 8233 (see Pub. 515)."

For most founders reading this page, two of those matter:

• Form W-8BEN if the payment is going to you as an individual.
• Form W-8BEN-E if the payment is going to a foreign entity.

There are others. Form 8233 is the one for a nonresident alien claiming a tax treaty benefit on income from personal services. Which one is correct depends on the payment, and Publication 515 is where the IRS sorts that out.

Now the part that catches people. It is in the Line 1 instructions, and it is worth reading twice: "If the owner of the disregarded entity is a foreign person, the owner must complete an appropriate Form W-8 instead of a Form W-9. This is the case even if the foreign person has a U.S. TIN." The Part I instructions say it again: "A disregarded U.S. entity that has a foreign owner must use the appropriate Form W-8."

Read that against a normal setup. You live outside the United States. You own a single-member Wyoming or Delaware LLC. The LLC has an EIN, a U.S. bank account, and U.S. customers. By default, a single-member LLC is disregarded for federal tax, which means the IRS looks through the company to the owner. The owner is you, and you are foreign. So the form is a W-8, not a W-9, and the person who completes it is you as the owner, not the LLC. The EIN does not change this. The instructions say the rule holds "even if the foreign person has a U.S. TIN."

This goes wrong constantly, because the onboarding screens of U.S. platforms make it easy to go wrong. You enter a U.S. company name, a U.S. EIN, and a U.S. address, and the platform shows you a W-9. It looks correct. It is not.

For the rules that apply to you instead, the IRS points to Publication 515 (withholding on nonresident aliens and foreign entities) and Publication 519 (the tax guide for aliens). That is the track you are on.

If you already signed a W-9 by mistake, tell the payer and give them the correct W-8 form. The payer is reporting your payments on the basis of what you certified, so the sooner the file is corrected, the less there is to unwind.

Which form is yours

The two columns never mix. There is no version of this where a foreign person signs a W-9 because it is more convenient, and no version where a U.S. person files a W-8BEN.

Common mistakes

🇺🇸 If the IRS counts you as a U.S. person

• Ignoring the request and assuming the payment arrives anyway. It arrives 24% lighter.
• Signing a fresh W-9 to fix a TIN mismatch the IRS has already flagged to the payer. The signature is not the fix. Correcting the TIN is.
• Leaving an old form in place after moving your invoicing from your own name to an LLC with a new EIN. The 1099 comes out under the number the payer has on file, not the number you meant.

🌏 If it does not

• Signing a W-9 because your U.S. LLC has an EIN and a U.S. address. An EIN is a number for a company. It says nothing about whether you are a U.S. person.
• Assuming the LLC files the W-9 "as a U.S. company." If the LLC is disregarded and you are foreign, the instructions send the owner to the appropriate Form W-8.
• Filing W-8BEN when the payment goes to an entity, or W-8BEN-E when it goes to you personally. The two forms are not interchangeable.

FAQ

Do I send Form W-9 to the IRS?

No. The top of the form says: "Give form to the requester. Do not send to the IRS." The requester is the company that is going to pay you. They keep the form and use your taxpayer number when they file an information return, usually a 1099.

What happens if I refuse to give a W-9?

The payer has to apply backup withholding at 24%. They send that 24% to the IRS instead of to you. On a $10,000 payment, $2,400 goes to the IRS and $7,600 reaches you.

Is the backup withholding rate 24% or 28%?

It is 24%. Some older articles still quote 28%. Use 24%.

I live abroad but my LLC is American. Do I sign a W-9?

No. The Form W-9 instructions say that if the owner of a disregarded entity is a foreign person, "the owner must complete an appropriate Form W-8 instead of a Form W-9," and that "this is the case even if the foreign person has a U.S. TIN." A single-member LLC is disregarded by default, so the form follows the owner, and the owner is foreign. This is true even though the LLC has a U.S. EIN, a U.S. bank account, and U.S. customers.

Does having a U.S. EIN make me a U.S. person?

No. An EIN identifies a business for filing purposes, and the Form W-9 instructions say in as many words that the W-8 rule applies "even if the foreign person has a U.S. TIN." You are a U.S. person if you are a U.S. citizen or a U.S. resident alien. For non-citizens, resident alien status is decided by the green card test or the substantial presence test, which are about you, not about your company.

I already signed a W-9 and I am not a U.S. person. What do I do?

Tell the payer, and give them the correct W-8 form. You signed a certification that you are a U.S. person, and it is now sitting in their records, shaping how they report payments made to you.

I have a green card but I live outside the United States. Which form?

If the green card test still makes you a U.S. person, you sign the W-9. That status does not end because you moved abroad. It ends when you formally give it up or when it is formally terminated. Our page on U.S. person status covers this.

Which payments does a W-9 lead to a 1099 for?

Tax Topic 307 lists them, and the common ones for founders are contractor pay (Form 1099-NEC), payment card and third-party network payouts (1099-K), rents and royalties (1099-MISC), interest (1099-INT), and dividends (1099-DIV).