person filling out form w-9

What is Tax Form W-9: Request for Taxpayer Identification Number and Certification?

Tax Form W-9 is used to request the taxpayer identification number (TIN) from any person or corporation you plan to do business with.

For small businesses, it’s common to send a W-9 to anyone you intend to file a form 1099 for at the end of the year. The W-9 lets that person know that you intend to report how much you paid them and allows the person to give you all the information you need to file a 1099 correctly.

So, if you are hiring an independent contractor, go ahead and send them a W-9. When they return the form to you, make sure it includes their name, business name (if applicable), address (so you know where to the send the recipient’s copy of the 1099), and TIN. The TIN can be either a social security number (SSN) or employer identification number (EIN). Also, verify that they’ve signed the form certifying that everything is correct.

What do I do if a contractor doesn’t fill it out?

If you’re entitled to a person’s TIN, they could be fined up to $50 per instance of not filling out a W-9. To make sure you’re not fined for failing to include a TIN on a 1099, ask the contractor for their TIN at least three times.

If an independent contractor does not fill out the form, then immediately begin backup withholding (at a rate of 24%) on any payments made to the contractor and send that amount to the IRS. Click here to learn more about backup withholding.

What do I do with it?

Form W-9 is similar to Form W-4 that you receive from your employees because you don’t need to send it to the IRS. Instead, keep it for your records and use the included information to create and file your 1099 forms at the end of the year.