In the United States, tax forms are issued by the Internal Revenue Service (IRS). These forms are used by individuals, corporations and other entities to report taxable income. The W-9 is one such form.
Definition
The W-9 is an information return filed with the IRS. It is commonly used by entities that hire independent contractors.
Function
The purpose of the W-9 is to gather a payee's correct tax information, including name, current address, and taxpayer identification number (TIN). The TIN is a payee's Social Security number (SSN) or Employer Identification Number (EIN).
Features
The W-9 is not directly collected by the IRS. It is used by an entity to gather a payee's tax information and subsequently included in that entity's 1099 form, which reports miscellaneous payments other than wages, typically those made to third parties or independent contractors. A W-9 also certifies that a payee is exempt from backup withholding.
Considerations
Providing the correct taxation information on a W-9 is critical. If deemed incorrect by the IRS, a payee may be subject to backup withholding.
Additional Information
Entities are allowed by law to create a substitute W-9 form so long as the substitute requests the same information, including name, address, TIN and information pertaining to backup withholding.
