How IRS Form W-9 Should Be Completed

IRS Form W-9 should be completed by each vendor who provides services to you as an independent contractor. This form should be used to request the taxpayer identification number of a US person and to determine whether 1099 reporting is a requirement for that person.

We recommend that Form W-9 be completed by all vendors prior to the first payment for services rendered.

Who Should Complete Form W-9?

Form W-9 should be completed by independent contractors.

Instructions for Completing Form W-9

Line 1-Name

The name reported on line 1 MUST be the name used on the tax return that will report this payment.

The name will be the business name IF the tax entity is one of the following types:

C Corporation
S Corporation
Partnership
Non-Profit Organization

The name will be an individual name if the tax entity is:

Sole Proprietor
Single Member LLC

Box 2-Business Name

If you have a business name, trade name, DBA name or disregarded entity name, fill it in here. If you do not have a business, you can leave this line blank.

The business name should match the IRS’s records.

Box 3-Tax Classification

This section defines how the payee is classified when it comes to federal taxes. The payee should check the first box if filing as an individual, sole proprietor or single-member limited liability company (LLC) owned by an individual and disregarded for U.S. federal tax purposes. A sole proprietor business operates under the owner’s Social Security number and hasn’t been registered as another type of business. Taxes apply to single-member LLCs in the same way.

The other boxes correspond to C corporation, S corporation, Partnership and Trust/estate businesses.

The Limited Liability Company box should be checked if the legal entity was formed as a limited liability under state law. Additionally, the payee should indicate how the entity is taxed. Additionally, the payee should indicate how the LLC is taxed. If the LLC is taxed as a partnership for federal taxes, (a “P” should be entered in the adjacent space), an LLC that has filed Form 8832 or 2553 and is taxed as a corporation (should enter “C” or “S” in the adjacent space depending on the type) or an LLC whose owner is another LLC not disregarded for federal tax purposes (fill in the appropriate letter in the adjacent space). If your LLC has not filed a request to be taxed as a C or S corporation, it is taxed as a Partnership. The “Note” on the form clarifies the LLC-specific rules.

It is absolutely critical that a box is selected on line 3 unless non-profit organizations (non-profit organizations need to complete Box 4.

Box 4-Exemptions

Box 4 should only be completed if the payee is exempt from backup withholding. If the payee is exempt from backup withholding, complete the first line with the appropriate code. This should apply to most entities. The following payees is exempt from backup withholding:

1. IRC 501(a) entities, IRA’s, or a custodial account
2. United States or any of its agencies or instrumentalities
3. A state, The District of Columbia, a U.S. commonwealth or possession or any of their political subdivisions, agencies, or instrumentalities.
4. Foreign government, or any of its political subdivisions

If the payee is exempt from reporting required by the Foreign Account Tax Compliance Act (FACTA), complete the second line. The latter only applies if the payee holds accounts outside the United States. If the payee maintains accounts in the U.S., leave the second line blank or write “N/A.” If the payee is unsure about the exemptions, Page 3 of the form outlines situations that would make you exempt.

Lines 5 & 6 – Address, city, state, and ZIP code

Line 5 requires the address (number, street, and apartment or suite number) where the information returns will be mailed. The following line, Line 6, leaves a space for you to enter the city, state and ZIP code of this address.

Lines 5 & 6 – Address, city, state, and ZIP code

Line 7 – Account number(s)

This is an optional line where you can fill in any account numbers your employer may need. Most individuals can leave this blank.

Part I-Taxpayer Identification Number

All vendors should provide a taxpayer identification number. The number to be reported will depend upon how the business is taxed based on the entries made on Line 3.

Here are the guidelines:

Sole Proprietors should report a social security number
Single Member LLC's either a social security number or an employer identification number can be reported.
C Corporation, S Corporation, Partnership, Non-Profit Organization should report an employer identification number.

If you are a resident alien and you are not eligible for a SSN, you should use your IRS individual taxpayer identification number (ITIN).

Part II – Certification

The payee should sign and date the form, indicating that accurate information was provided.