Glossary
Form W-9
Form W-9 is the IRS form a US person, including a resident alien or a US company, gives to a business that pays them, so the business has the correct taxpayer identification number to report the payments on a Form 1099; the payee gives it to the requester and does not send it to the IRS.
Also called: W-9, W9, Request for Taxpayer Identification Number and Certification, W-9 form for contractors, TIN certification form
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Definition
Before a US business can report what it paid someone, it needs that person’s taxpayer identification number, or TIN. Form W-9 is how it gets one. The form’s full name says so: Request for Taxpayer Identification Number and Certification. The current revision is dated March 2024.
The IRS puts the purpose in one sentence. A business “who is required to file an information return with the IRS is giving you this form because they must obtain your correct taxpayer identification number (TIN).” The TIN can be a social security number, an individual taxpayer identification number or an employer identification number. The information returns it feeds include Form 1099-NEC for nonemployee compensation, Form 1099-MISC and Form 1099-K.
The form never goes to the IRS. The top of the form says it plainly: “Give form to the requester. Do not send to the IRS.” The payer keeps it as the record behind every Form 1099 it files for that payee.
Form W-9 is also a sorting form. The instructions say to use it “only if you are a U.S. person (including a resident alien).” A nonresident alien or a foreign entity gives the payer a Form W-8 or Form 8233 instead. Which form a payee hands over decides whether their payments go on the 1099 track or the foreign withholding track that ends in a Form 1042-S.
Key points
- +Form W-9 is for US persons: US citizens, resident aliens, and US partnerships, corporations, estates and trusts. Foreign payees use a Form W-8 or Form 8233.
- +The payee gives the form to the requester. The form itself says not to send it to the IRS.
- +By signing, the payee certifies the TIN is correct, that they are not subject to backup withholding (or are exempt from it), and that they are a US person.
- +For payments to a nonemployee for services, the payee must give a correct TIN but does not have to sign the certification unless the IRS has notified them of a previously incorrect TIN.
- +A payee who does not furnish a TIN is subject to backup withholding of 24% on reportable payments until they provide one.
- +A payee without a TIN can enter “Applied For”, but outside interest, dividend and certain readily tradable instruments, the 60-day grace does not apply.
- +A payee must give a new Form W-9 if the name or TIN on the account changes.
- +Stripe’s W-8 and W-9 Connect product, a US preview, collects these forms from connected accounts and can block payouts until one is submitted.
The four things a payee certifies on a W-9
Part II of the form is a certification signed under penalties of perjury. The payee certifies that:
1. The number on the form is their correct TIN, or they are waiting for one to be issued. 2. They are not subject to backup withholding, because they are exempt, because the IRS has never notified them that they are, or because the IRS has told them they no longer are. 3. They are a US citizen or other US person. 4. Any FATCA exemption code they entered is correct.
For a payer, items 1 and 3 carry the weight. Item 1 is the number that goes on the Form 1099. Item 3 is the reason no foreign withholding applies. The instructions spell out who counts as a US person: an individual who is a US citizen or US resident alien, a partnership, corporation, company or association created or organized in the United States, a domestic estate, or a domestic trust.
The signature rules surprise people. For “payments to a nonemployee for services” and the other payments the instructions group as “other payments”, the payee “must give your correct TIN, but you do not have to sign the certification unless you have been notified that you have previously given an incorrect TIN.” Most payers still ask for a signed form, because a signed certification is the stronger record.
What happens when the W-9 is missing or wrong
The W-9 instructions list the conditions under which payments to a payee “will be subject to backup withholding.” For a contractor, the two that matter are a payee who does not furnish a TIN to the requester, and the IRS telling the requester that the payee furnished an incorrect TIN.
Backup withholding means the payer holds back 24% of the payment and pays it to the IRS. The instructions name “nonemployee pay” and “payments made in settlement of payment card and third-party network transactions” among the payments it can reach. Our backup withholding entry covers the timing rules for a payer, including the B notice process after an IRS mismatch notice.
A payee without a TIN yet can write “Applied For” on the form and sign it. That buys time only for interest, dividends and certain payments on readily tradable instruments, which get 60 days. The instructions are explicit that “the 60-day rule does not apply to other types of payments,” so a contractor who writes “Applied For” is subject to backup withholding on each payment until the TIN arrives.
The payee carries penalties too. Failing to furnish a correct TIN to a requester is a $50 penalty for each failure unless it is due to reasonable cause, and a false statement with no reasonable basis that results in no backup withholding is a $500 penalty.
W-9 or W-8: the 1099 track and the 1042-S track
Every payee a US business pays ends up on one of two reporting tracks, and the form they give decides which one.
A Form W-9 puts them on the 1099 track. The payer reports the year’s total on a Form 1099-NEC, 1099-MISC or 1099-K, using the name and TIN from the W-9. A US citizen living abroad is still a US person and still gives a W-9.
A Form W-8BEN, W-8BEN-E or Form 8233 puts them on the foreign track. No Form 1099 is issued. If the payment is US-source income subject to withholding, it is reported on Form 1042-S instead.
The instructions also cover the person in between. A nonresident alien who becomes a resident alien generally can no longer use a tax treaty to reduce or eliminate US tax. The exception is a treaty’s saving clause, and a resident alien relying on one must attach a statement to the W-9 setting out five specified items. In practice, when a contractor’s status changes, the form on file has to change with it. A payee must also give a new W-9 if the name or TIN on the account changes.
Collecting W-9 forms on Stripe Connect
On a Stripe Connect platform, the question of who requests the W-9 follows the question of who files the 1099. Stripe’s US tax reporting documentation says Stripe issues 1099-K forms for connected accounts where Stripe controls the pricing, or where the connected account pays fees directly to Stripe. Where the platform controls the pricing, “the platform is responsible for filing any relevant 1099 forms.” A platform paying contractors is usually in that second group, so it needs a W-9 from each US contractor.
Stripe offers a product for this. Its W-8 and W-9 Connect documentation says a W-9 “is for US residents or citizens and is used to confirm their TIN (SSN/ITIN/EIN).” Access is limited to US preview users. A platform can collect the form at onboarding, or later through the Accounts API, and can set an enforcement threshold that blocks payouts until the form is submitted: after a volume of processing in US dollars, after a number of days, or whichever comes first. Submitted forms can be downloaded as PDFs from the Dashboard.
Stripe frames the reason in terms of 1099 accuracy: platforms “might be subject to IRS fines up to 340 USD per incorrect submission if they file 1099s with incorrect information,” and W-8 and W-9 forms let them collect certified tax information “before issuing 1099s.” Stripe’s 1099-NEC criteria for a connected account are being based in the US or a US taxpayer, with $2,000 or more in payments in the previous calendar year.
Without the preview, platforms collect the W-9 themselves, usually as a signed PDF or through an e-signature tool, and keep it with the contractor’s records.
What QuickBooks shows for payments to W-9 contractors
Acodei syncs Stripe Connect transfers through Balance Transaction Mapping. You create a product for Stripe Connect, usually linked to an expense or cost of goods sold account, and map Transfer (Stripe Connect) to it on the Account Mapping page. Acodei then processes Connect activity on the daily balance summary or upon payout, depending on your settings.
Acodei sends aggregated transfer information, so QuickBooks shows the total transferred, not which contractor received each transfer. A W-9 contractor’s payments sit inside that total. The form, the TIN and the per-contractor totals that go on each Form 1099 belong in Stripe or in your contractor records, not in QuickBooks.
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Frequently asked questions
Who fills out Form W-9, and where does it go?
The payee fills it out: the contractor, vendor or other US person being paid. They give it to the business paying them, which the form calls the requester. The form says not to send it to the IRS. The business keeps it on file and uses the name and TIN from it on any Form 1099 it files for that payee.
Does a contractor have to sign Form W-9?
Not always. For payments to a nonemployee for services, the IRS instructions say the payee must give a correct TIN but does not have to sign the certification unless they have been notified that they previously gave an incorrect TIN. Most payers ask for a signed form anyway, because the signed certification is the stronger record.
What happens if a contractor never returns a W-9?
Without a TIN, the contractor’s reportable payments are subject to backup withholding: the payer holds back 24% and pays it to the IRS. Writing “Applied For” on the form does not give a contractor the 60-day grace period, which applies only to interest, dividends and certain readily tradable instruments. The contractor also faces a $50 penalty for each failure to furnish a correct TIN.
Should a foreign contractor fill out a W-9?
No. The W-9 instructions say to use the form only if you are a US person, including a resident alien. A nonresident alien gives the payer a Form W-8BEN, or a Form 8233 for a treaty exemption on services performed in the United States, and a foreign entity gives a Form W-8BEN-E. A US citizen living abroad still gives a W-9.
Does Stripe collect W-9 forms from connected accounts?
Stripe’s W-8 and W-9 Connect product does, but it is a US preview with limited access. With it, a platform can collect W-9 forms at onboarding or later through the Accounts API, block payouts until a form is submitted after a set volume or number of days, and download completed forms from the Dashboard. Without it, collect the form yourself.
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Related reading
- Form W-8BEN
- Backup Withholding
- Form 1099-NEC
- Form 1042-S
- Stripe Connect backup withholding: the 24% in QuickBooks
- Stripe Connect 1099-NEC forms and your QuickBooks books
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- Form 1042-S
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