Complete guide to W-9 forms for independent contractors

W-9 forms may seem like routine paperwork, but they play a critical role in how businesses hire, pay, and report earnings for independent contractors in the United States.

For global companies or distributed teams, understanding the W-9 is about compliance, reducing misclassification risks, staying audit-ready, and ensuring smooth contractor onboarding. And if you’re managing dozens of freelancers or consultants across borders, a Contractor of Record (COR) can streamline the entire process from collecting W-9s to issuing 1099s.

In this comprehensive guide, we break down what a W-9 is, when and how to use it, and how it differs from forms like the W-2. We’ll also explain how Multiplier’s Contractor of Record, also known as Agent of Record (AOR), solution helps you scale contractor teams in the US without drowning in paperwork or legal risk.

What is a W-9 form?

The IRS Form W-9, officially known as the “Request for Taxpayer Identification Number and Certification,” is a document that businesses use to collect essential tax information from US-based independent contractors.

A W-9 is:

• Issued to contractors, not employees
• Used to collect the contractor’s name, address, and Taxpayer Identification Number (TIN)
• Required by businesses who will later report contractor payments on a 1099-NEC

You don’t submit a W-9 to the IRS. Instead, you collect and retain it for tax reporting and compliance purposes.

Key takeaway: If you’re hiring a U.S.-based contractor, you need their W-9 on file before issuing payment.

What are W9 Forms used for?

Employers, banks, and financial institutions use the IRS W-9 Tax form. These forms provide detailed information on Tax Identification Numbers (TIN), Employee Identification Numbers (EIN), and SSNs (Social Security Numbers). There are a few instances where people think W8 to be similar, however, both the W8 vs. W9 Tax forms are different.

The need to furnish a W-9 form for any individual

Typically, the W-9 form is for any individual who is getting paid by another party and is not an employee of that party and needs to file a W-9 form. The form solely aims to confirm a person’s Tax Identification Number (TIN). Know more in detail about W-9 vs. 1099 difference.

There can be a number of scenarios where a person must furnish a W-9 form and send it to the concerned person.

1. If the person works as a freelancer, contractor, or consultant and earns $600 or more in a year from a single client, that client will require a completed W-9 form from the person in order to issue Form 1099-NEC.
2. The bank or the financial institution where the person invests will require a completed W-9 form to complete the other type of 1099 forms.
3. If an individual forgives or cancels a debt owed to them. They would require to file the form 1099C with the IRS. To complete the process, the debtor must provide W-9 Form to the individual.
4. Banks or Financial Institutions sometimes require the W-9 form while opening a new account.

While W-9s are essential for independent contractors, understanding how they differ from W-2 employees is critical to avoid compliance risks.

W-9 vs W-2: Understanding worker classification

One of the most common compliance mistakes global companies make is confusing W-9 contractors with W-2 employees. This can trigger audits, fines, and even legal disputes around benefits and labor protections.

Misclassification risk: If a contractor is treated like an employee (fixed hours, company tools, ongoing supervision), the IRS may reclassify them, resulting in back taxes and penalties.

How to fill out a W-9 form

There are nine pieces of information that are required to fill out the IRS W-9 form. An individual must be aware of this information before filling out the form. However, all this information must be accurate and complete, or it can lead to a penalty for the individual.

The Form W-9 is very simple, easy, and straightforward to complete. All the pages of the W-9 Form are available on the IRS website. Some pages may have additional information as required by the IRS.

1. Line 1: Name
   • Enter your full legal name as it appears on your income tax return.
   • If you are an individual, sole proprietor, or a single-member LLC that is disregarded for tax purposes, this will be your personal name.
   • If you are a corporation or a multi-member LLC, enter your business’s legal name.
2. Line 2: Business name/disregarded entity name (if different from above)
   • If you operate under a business name that is different from your legal name on Line 1 (e.g., a “Doing Business As” or DBA name), enter it here.
   • If you are a sole proprietor without a separate business name, you can leave this line blank.
   • If your business is a corporation or multi-member LLC, and you’ve already entered its legal name on Line 1, leave this line blank.
3. Line 3a: Federal tax classification
   • Check only one box that applies to your federal tax classification.
     • Individual/sole proprietor or single-member LLC: Check this if you are an individual, a sole proprietorship, or a single-member LLC that is disregarded for U.S. federal tax purposes (meaning the owner reports the income on their personal tax return).
     • C Corporation: Check this if your business is incorporated and taxed as a C corporation.
     • S Corporation: Check this if your business is incorporated and has elected to be taxed as an S corporation.
     • Partnership: Check this if your business is a partnership.
     • Trust/estate: Check this if you are filling out the form for a trust or estate.
     • Limited Liability Company (LLC): If your LLC has chosen to be taxed as a C corporation, S corporation, or partnership, check this box and then enter “C,” “S,” or “P” in the space provided to indicate how it’s taxed. Note: If you are a single-member LLC, do NOT check this box; instead, check “Individual/sole proprietor or single-member LLC” (as explained above).
     • Other (see instructions): Only use this if none of the above categories apply, and refer to the IRS W-9 instructions for specific “Other” classifications.
4. Line 3b (Applies to specific entities)
   • This box is for specific situations. You generally only check this if:
     • On Line 3a, you checked “Partnership,” “Trust/estate,” or “LLC” and entered “P” (for Partnership).
     • AND you are providing this form to a partnership, trust, or estate in which you have an ownership interest.
     • AND you have any foreign partners, owners, or beneficiaries.
   • Most individuals and small businesses will leave this blank.
5. Line 4: Exemptions (Optional for most individuals)
   • Most individuals and small businesses will leave this section blank.
   • This section is for certain entities (e.g., some corporations, governmental entities) that are exempt from backup withholding or certain Foreign Account Tax Compliance Act (FATCA) reporting. If an exemption applies to you, you’ll need to enter an exempt payee code and/or an exemption from FATCA reporting code. Refer to the W-9 instructions for these codes if applicable.
6. Line 5: Address (number, street, and apt. or suite no.)
   • Enter your mailing address where you will receive tax documents (like Form 1099-NEC) from the requester.
7. Line 6: City, state, and ZIP code
   • Enter the city, state, and ZIP code corresponding to the address on Line 5.
8. Line 7: List account number(s) here (optional)
   • You can include any account numbers that the requester might use to identify you (e.g., a vendor ID or client account number). This is optional and often left blank.
9. Part I: Taxpayer Identification Number (TIN)

• • In this section, you will provide your Taxpayer Identification Number (TIN). This will be either your Social Security Number (SSN) or your Employer Identification Number (EIN).
  • Social Security Number (SSN): If you are an individual or a sole proprietor, you will typically enter your SSN.
  • Employer Identification Number (EIN): If you are a corporation, partnership, or an LLC that has an EIN (and is not a disregarded single-member LLC using the owner’s SSN), you will enter your EIN.
  • Important: Enter only one number (SSN or EIN). Do not enter both.

What is Backup Withholding?

Backup Withholding is a tax withholding method by which IRS from an individual or a business. This method is applicable when the individual or the business doesn’t provide the correct TIN, or there are any discrepancies with the W-9 tax form.

10. Part II: Certification

• Read the certification statements carefully. By signing, you are certifying that:
  • The TIN you are providing is correct.
  • You are not subject to backup withholding (or you are exempt).
  • You are a U.S. person (including a U.S. resident alien).
• Signature: Sign and date the form in the designated spaces. Your signature is crucial for the form to be valid. An electronic signature is usually acceptable if the platform allows it.

After Completing the Form:

• Review: Double-check all information for accuracy, especially your name, TIN, and address.
• Return to Requester: Give the completed and signed W-9 form to the business or entity that requested it. Do not send it to the IRS.
• Keep a Copy: It’s a good idea to keep a copy of the completed W-9 for your records.

Who needs to issue and collect W-9 forms?

Businesses (US or non-US) must collect W-9s when:

• Paying a U.S.-based contractor over $600 in a calendar year
• Engaging an individual or sole proprietor for services (not goods)
• Preparing to issue a 1099-NEC at year-end

Contractors must complete and return a W-9 before being paid.

Important: If a contractor refuses to provide a W-9, you may be required to withhold 24% backup withholding per IRS rules.

When do you not need a W‑9?

While W-9s are commonly required, there are specific scanerios where a different form—or no form at all—is appropriate. Here’s a quick breakdown:

Always assess the business relationship carefully and consult a tax advisor when uncertain.

International contractor form requirements by region

Depending on where your contractor is located, different IRS forms apply for tax and reporting purposes. The table below highlights the key regional differences:

How a Contractor of Record simplifies W-9 compliance

Multiplier’s COR platform automates the entire contractor lifecycle:

Success story: “We hired contractors in Philippines and enjoyed 800% payroll cost savings with 100% compliance.” – Jillyn Dillon, Founder and Executive Director, Technology Aloha

Watch short tutorial videos on how to hire and manage contractors using Multiplier’s COR.

The W-9 to 1099 workflow: Step-by-step process

Here’s how W-9s fit into your year-round contractor management process:

1. Collect the W-9 during onboarding – Before making the first payment to the contractor
2. Store the form securely – For future 1099-NEC preparation and audit readiness
3. Track payments throughout the year – Especially once total compensation exceeds the $600 threshold
4. Generate Form 1099-NEC by January 31 – Using the information provided in the W-9
5. Distribute the 1099 to both the contractor and the IRS (or SSA)

Without a clean W-9, you risk incorrect 1099s and the penalties that follow.

Common W-9 mistakes and how to avoid them

Here’s a quick look at common W-9 errors, their consequences, and how to prevent them:

Multiplier’s COR ensures each contractor’s tax documentation is collected, validated, and secured with no spreadsheet guesswork or last-minute chases.

Penalties for W-9 non-compliance

Below is a breakdown of key W-9 violations, potential penalties, and their broader implications:

Simplifying W-9 compliance with Multiplier

If you’re engaging U.S.-based contractors, collecting W-9s is a critical part of your compliance process. Whether you’re paying one freelancer or 50 remote consultants, getting this wrong can cost you time, money, and IRS penalties.

Multiplier’s Contractor of Record platform automates everything: W-9 collection, 1099 prep, secure storage, and contractor onboarding in one dashboard.

Eliminate manual form collection

Forget chasing down forms over email or storing them in scattered folders. Multiplier requests W-9s automatically during contractor onboarding, ensuring every freelancer submits valid tax info before work begins.

Automate IRS compliance

Multiplier gathers W-9s securely, validates the data, and integrates it into your end-of-year 1099 workflows so you never miss a deadline or file incorrect information with the IRS.

Store everything audit-ready

All W-9s, 1099s, and payment records are stored securely and linked to the corresponding contractor profile. If you’re ever audited, every document is just a click away.

Save time and reduce misclassification risks

By handling W-9 collection, contractor classification, and tax filing support in one platform, Multiplier cuts hours of admin time and helps reduce the risk of treating a contractor like an employee in the eyes of the IRS.

Book a demo today to see how Multiplier simplifies W-9 and contractor compliance for global teams.