IRS Form W-9 Instructions for Completing Instructions

IRS Form W-9 Instructions for Completing Instructions

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Instructions for the
Requester of Form W-9
(Rev. October 2018)
Request for Taxpayer Identification Number
and Certification
Department of the Treasury
Internal Revenue Service
Section references are to the Internal Revenue Code unless
otherwise noted.
Future Developments
For the latest developments related to Form W-9 and its
instructions, such as legislation enacted after they were
published, go to IRS.gov/FormW9.
What’s New
Backup withholding rate. The backup withholding rate is 24%
for reportable payments.
Reminders
FATCA and backup withholding exemptions. FATCA
requires a participating foreign financial institution to report all
U.S. account holders that are specified U.S. persons. Form W-9
has an Exemptions box on the front of the form that includes
entry for the Exempt payee code (if any) and Exemption from
FATCA Reporting Code (if any). The references for the
appropriate codes are in the Exemptions section of Form W-9,
and in the Payees Exempt From Backup Withholding and
Payees and Account Holders Exempt From FATCA Reporting
sections of these instructions.
The Certification section in Part II of Form W-9 includes
certification relating to FATCA reporting.
Backup withholding liability. If you do not collect backup
withholding from affected payees as required, you may become
liable for any uncollected amount.
TIN matching e-services. The IRS website offers TIN
Matching e-services for certain payers to validate name and TIN
combinations. See Taxpayer Identification Number (TIN)
Matching, later.
How Do I Know When To Use
Form W-9?
Use Form W-9 to request the taxpayer identification number
(TIN) of a U.S. person (including a resident alien) and to request
certain certifications and claims for exemption. (See Purpose of
Form on Form W-9.) Withholding agents may require signed
Forms W-9 from U.S. exempt recipients to overcome a
presumption of foreign status. For federal tax purposes, a U.S.
person includes but is not limited to:
• An individual who is a U.S. citizen or U.S. resident alien;
• A partnership, corporation, company, or association created
or organized in the United States or under the laws of the United
States;
• Any estate (other than a foreign estate); or
• A domestic trust (as defined in Regulations section
301.7701-7).
A partnership may require a signed Form W-9 from its U.S.
partners to overcome a presumption of foreign status and to
avoid withholding on the partner's allocable share of the
partnership's effectively connected income. For more
information, see Regulations section 1.1446-1.
A participating foreign financial institution (PFFI) should
request Form W-9 from an account holder that is a U.S. person.
If an account is jointly held, the PFFI should request a Form W-9
from each holder that is a U.S. person.
Advise foreign persons to use the appropriate Form W-8 or
Form 8233, Exemption From Withholding on Compensation for
Independent (and Certain Dependent) Personal Services of a
Nonresident Alien Individual. See Pub. 515, Withholding of Tax
on Nonresident Aliens and Foreign Entities, for more information
and a list of the W-8 forms.
Electronic Submission of Forms W-9
Requesters may establish a system for payees and payees'
agents to submit Forms W-9 electronically, including by fax. A
requester is anyone required to file an information return. A
payee is anyone required to provide a taxpayer identification
number (TIN) to the requester.
Payee's agent. A payee's agent can be an investment advisor
(corporation, partnership, or individual) or an introducing broker.
An investment advisor must be registered with the Securities
and Exchange Commission (SEC) under the Investment
Advisers Act of 1940. The introducing broker is a broker-dealer
that is regulated by the SEC and the National Association of
Securities Dealers, Inc., and that is not a payer. Except for a
broker who acts as a payee's agent for “readily tradable
instruments,” the advisor or broker must show in writing to the
payer that the payee authorized the advisor or broker to transmit
the Form W-9 to the payer.
Electronic system. Generally, the electronic system must:
• Ensure the information received is the information sent, and
document all occasions of user access that result in the
submission;
• Make reasonably certain that the person accessing the
system and submitting the form is the person identified on Form
W-9, the investment advisor, or the introducing broker;
• Provide the same information as the paper Form W-9;
• Be able to supply a hard copy of the electronic Form W-9 if
the Internal Revenue Service requests it; and
• Require as the final entry in the submission an electronic
signature by the payee whose name is on Form W-9 that
authenticates and verifies the submission. The electronic
signature must be under penalties of perjury and the perjury
statement must contain the language of the paper Form W-9.
For Forms W-9 that are not required to be signed, the
electronic system need not provide for an electronic
signature or a perjury statement.
For more details, see the following.
• Announcement 98-27, which is on page 30 of Internal
Revenue Bulletin 1998-15 at IRS.gov/pub/irs-irbs/irb98-15.pdf.
• Announcement 2001-91, which is on page 221 of Internal
Revenue Bulletin 2001-36 at IRS.gov/pub/irs-irbs/irb01-36.pdf.
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Individual Taxpayer Identification
Number (ITIN)
Form W-9 (or an acceptable substitute) is used by persons
required to file information returns with the IRS to get the payee's
(or other person's) correct name and TIN. For individuals, the
TIN is generally a social security number (SSN).
However, in some cases, individuals who become U.S.
resident aliens for federal tax purposes are not eligible to obtain
an SSN. This includes certain resident aliens who must receive
information returns but who cannot obtain an SSN.
These individuals must apply for an ITIN on Form W-7,
Application for IRS Individual Taxpayer Identification Number,
unless they have an application pending for an SSN. Individuals
who have an ITIN must provide it on Form W-9.
Note. ITINs that haven’t been included on a U.S. federal tax
return at least once in the last 3 consecutive tax years will expire.
Expired ITINs must be renewed in order to avoid delays in
processing the ITIN holder’s tax return. If the IRS deactivates the
ITIN because it has expired, the ITIN may still be used on Form
W-9. However, the ITIN holder will have to apply to renew the
deactivated ITIN if there is a need to file a tax return. For more
information, see the Instructions for Form W-7.
Substitute Form W-9
You may develop and use your own Form W-9 (a substitute
Form W-9) if its content is substantially similar to the official IRS
Form W-9 and it satisfies certain certification requirements.
You may incorporate a substitute Form W-9 into other
business forms you customarily use, such as account signature
cards. However, the certifications on the substitute Form W-9
must clearly state (as shown on the official Form W-9) that under
penalties of perjury:
1. The payee's TIN is correct,
2. The payee is not subject to backup withholding due to
failure to report interest and dividend income,
3. The payee is a U.S. person, and
4. The FATCA code entered on this form (if any) indicating
that the payee is exempt from FATCA reporting is correct.
You may provide certification instructions on a substitute
Form W-9 in a manner similar to the official form. If you are not
collecting a FATCA exemption code by omitting that field from
the substitute Form W-9 (see Payees and Account Holders
Exempt From FATCA Reporting, later), you may notify the payee
that item 4 does not apply.
You may not:
1. Use a substitute Form W-9 that requires the payee, by
signing, to agree to provisions unrelated to the required
certifications, or
2. Imply that a payee may be subject to backup withholding
unless the payee agrees to provisions on the substitute form that
are unrelated to the required certifications.
A substitute Form W-9 that contains a separate signature line
just for the certifications satisfies the requirement that the
certifications be clearly stated.
If a single signature line is used for the required certifications
and other provisions, the certifications must be highlighted,
boxed, printed in bold-face type, or presented in some other
manner that causes the language to stand out from all other
information contained on the substitute form. Additionally, the
following statement must be presented to stand out in the same
manner as described above and must appear immediately
above the single signature line:
“The Internal Revenue Service does not require your consent
to any provision of this document other than the certifications
required to avoid backup withholding.”
If you use a substitute form, you are required to provide the
Form W-9 instructions to the payee only if he or she requests
them. However, if the IRS has notified the payee that backup
withholding applies, then you must instruct the payee to strike
out the language in the certification that relates to
underreporting. This instruction can be given orally or in writing.
See item 2 of the Certification on Form W-9. You can replace
“defined below” with “defined in the instructions” in item 3 of the
Certification on Form W-9 when the instructions will not be
provided to the payee except upon request. For more
information, see Rev. Proc. 83-89,1983-2 C.B. 613; amplified by
Rev. Proc. 96-26, which is on page 22 of Internal Revenue
Bulletin 1996-8 at IRS.gov/pub/irs-irbs/irb96-08.pdf.
TIN Applied For
For interest and dividend payments and certain payments with
respect to readily tradable instruments, the payee may return a
properly completed, signed Form W-9 to you with “Applied For”
written in Part I. This is an “awaiting-TIN” certificate. The payee
has 60 calendar days, from the date you receive this certificate,
to provide a TIN. If you do not receive the payee's TIN at that
time, you must begin backup withholding on payments.
Reserve rule. You must backup withhold on any reportable
payments made during the 60-day period if a payee withdraws
more than $500 at one time, unless the payee reserves an
amount equal to the current year's backup withholding rate on all
reportable payments made to the account.
Alternative rule. You also may elect to backup withhold during
this 60-day period, after a 7-day grace period, under one of the
two alternative rules discussed below.
Option 1. Backup withhold on any reportable payments if the
payee makes a withdrawal from the account after the close of 7
business days after you receive the awaiting-TIN certificate.
Treat as reportable payments all cash withdrawals in an amount
up to the reportable payments made from the day after you
receive the awaiting-TIN certificate to the day of withdrawal.
Option 2. Backup withhold on any reportable payments
made to the payee's account, regardless of whether the payee
makes any withdrawals, beginning no later than 7 business days
after you receive the awaiting-TIN certificate.
The 60-day exemption from backup withholding does
not apply to any payment other than interest, dividends,
and certain payments relating to readily tradable
instruments. Any other reportable payment, such as
nonemployee compensation, is subject to backup withholding
immediately, even if the payee has applied for and is awaiting a
TIN.
Even if the payee gives you an awaiting-TIN certificate, you must
backup withhold on reportable interest and dividend payments if
the payee does not certify, under penalties of perjury, that the
payee is not subject to backup withholding.
If you do not collect backup withholding from affected payees as
required, you may become liable for any uncollected amount.
Payees Exempt From Backup
Withholding
The following payees are exempt from backup withholding with
respect to the payments below, and should enter the
corresponding exempt payee code on Form W-9. You may rely
on the payee’s claim of exemption unless you have actual
knowledge that the exempt payee code and/or classification
selected are not valid, or if they are inconsistent with each other.
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In that case, you may rely on the Form W-9 for purposes of
obtaining the payee’s TIN, but you must treat the payee as
non-exempt. If the payee failed to enter an exempt payee code,
but the classification selected indicates that the payee is
exempt, you may accept the classification and treat the payee as
exempt unless you have actual knowledge that the classification
is not valid.
If the payee is not exempt, you are required to backup
withhold on reportable payments if the payee does not provide a
TIN in the manner required or does not sign the certification, if
required.
1. An organization exempt from tax under
section 501(a), any IRA, or a custodial account under section
403(b)(7) if the account satisfies the requirements of section
401(f)(2);
2. The 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. A foreign government or any of its political subdivisions,
agencies, or instrumentalities;
5. A corporation;
6. A dealer in securities or commodities required to register
in the United States, the District of Columbia, or a U.S.
commonwealth or possession;
7. A futures commission merchant registered with the
Commodity Futures Trading Commission;
8. A real estate investment trust;
9. An entity registered at all times during the tax year under
the Investment Company Act of 1940;
10. A common trust fund operated by a bank under
section 584(a);
11. A financial institution;
12. A middleman known in the investment community as a
nominee or custodian; or
13. A trust exempt from tax under section 664 or described in
section 4947.
The following types of payments are exempt from backup
withholding as indicated for payees listed in 1 through 13 above.
Interest and dividend payments. All listed payees are exempt
except the payee in item 7.
Broker transactions. All payees listed in items 1 through 4 and
6 through 11 are exempt. Also, C corporations are exempt. A
person registered under the Investment Advisers Act of 1940
who regularly acts as a broker also is exempt.
Barter exchange transactions and patronage dividends.
Only payees listed in items 1 through 4 are exempt.
Payments reportable under sections 6041 and 6041A.
Payees listed in items 1 through 5 generally are exempt.
However, the following payments made to a corporation and
reportable on Form 1099-MISC, Miscellaneous Income, are not
exempt from backup withholding.
• Medical and health care payments.
• Attorneys' fees (also gross proceeds paid to an attorney,
reportable under section 6045(f)).
• Payments for services paid by a federal executive agency.
(See Rev. Rul. 2003-66, which is on page 1115 of Internal
Revenue Bulletin 2003-26 at IRS.gov/pub/irs-irbs/irb03-26.pdf.)
Payments made in settlement of payment card or third party network transactions. Only payees listed in items 1 through
4 are exempt.
Payments Exempt From Backup
Withholding
Payments that are not subject to information reporting also are
not subject to backup withholding. For details, see sections
6041, 6041A, 6042, 6044, 6045, 6049, 6050A, 6050N, and
6050W and their regulations. The following payments generally
are exempt from backup withholding.
Dividends and patronage dividends.
• Payments to nonresident aliens subject to withholding under
section 1441.
• Payments to partnerships not engaged in a trade or business
in the United States and that have at least one nonresident alien
partner.
• Payments of patronage dividends not paid in money.
• Payments made by certain foreign organizations.
• Section 404(k) distributions made by an ESOP.
Interest payments.
• Payments of interest on obligations issued by individuals.
However, if you pay $600 or more of interest in the course of
your trade or business to a payee, you must report the payment.
Backup withholding applies to the reportable payment if the
payee has not provided a TIN or has provided an incorrect TIN.
• Payments described in section 6049(b)(5) to nonresident
aliens.
• Payments on tax-free covenant bonds under
section 1451.
• Payments made by certain foreign organizations.
• Mortgage or student loan interest paid to you.
Other types of payment.
• Wages.
• Distributions from a pension, annuity, profit-sharing or stock
bonus plan, any IRA, an owner-employee plan, or other deferred
compensation plan.
• Distributions from a medical or health savings account and
long-term care benefits.
• Certain surrenders of life insurance contracts.
• Distribution from qualified tuition programs or
Coverdell ESAs.
• Gambling winnings if regular gambling winnings withholding is
required under section 3402(q). However, if regular gambling
winnings withholding is not required under section 3402(q),
backup withholding applies if the payee fails to furnish a TIN.
• Real estate transactions reportable under
section 6045(e).
• Cancelled debts reportable under section 6050P.
• Fish purchases for cash reportable under
section 6050R.
Payees and Account Holders Exempt
From FATCA Reporting
Reporting under chapter 4 (FATCA) with respect to U.S. persons
generally applies only to foreign financial institutions (FFI)
(including a branch of a U.S. financial institution that is treated as
an FFI under an applicable intergovernmental agreement (IGA)).
Thus, for example, a U.S. financial institution maintaining an
account in the United States does not need to collect an
exemption code for FATCA reporting. If you are providing a
Form W-9, you may pre-populate the FATCA exemption code
with "Not Applicable," "N/A," or a similar indication that an
exemption from FATCA reporting does not apply. Any payee that
provides such a form, however, cannot be treated as exempt
from FATCA reporting. For details on the FATCA reporting
requirements, including specific information regarding which
financial institutions are required to report, see sections 1471 to
1474 and related regulations. See Regulations section
1.1471-3(d)(2) for when an FFI may rely on documentary
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evidence to treat a U.S. person as other than a specified U.S.
person and see Regulations section 1.1471-3(f)(3) for when an
FFI may presume a U.S. person as other than a specified U.S.
person.
If you receive a Form W-9 with a FATCA exemption code and
you know or have reason to know the person is a specified U.S.
person, you may not rely on the Form W-9 to treat the person as
exempt from FATCA reporting. However, you may still rely on an
otherwise completed Form W-9 to treat a person as a specified
U.S. person. An exemption from FATCA reporting (or lack
thereof) does not affect backup withholding as described earlier
in these instructions. The following are not specified U.S.
persons and are thus exempt from FATCA reporting.
A. An organization exempt from tax under section 501(a), or
any individual retirement plan as defined in section 7701(a)(37);
B. The United States or any of its agencies or
instrumentalities;
C. A state, the District of Columbia, a U.S. commonwealth or
possession, or any of their political subdivisions, agencies, or
instrumentalities;
D. A corporation the stock of which is regularly traded on one
or more established securities markets, as described in
Regulations 1.1472-1(c)(1)(i);
E. A corporation that is a member of the same expanded
affiliated group as a corporation described in Regulations
1.1472-1(c)(1)(i);
F. A dealer in securities, commodities, or derivative financial
instruments (including notional principal contracts, futures,
forwards, and options) that is registered as such under the laws
of the United States or any State;
G. A real estate investment trust;
H. A regulated investment company as defined in section
851 or an entity registered at all times during the tax year under
the Investment Company Act of 1940;
I. A common trust fund as defined in section 584(a);
J. A bank as defined in section 581;
K. A broker;
L. A trust exempt from tax under section 664 or described in
section 4947; or
M. A tax-exempt trust under a section 403(b) plan or section
457(g) plan.
Joint Foreign Payees
If the first payee listed on an account gives you a
Form W-8 or a similar statement signed under penalties of
perjury, backup withholding applies unless:
1. Every joint payee provides the statement regarding
foreign status, or
2. Any one of the joint payees who has not established
foreign status gives you a TIN.
If any one of the joint payees who has not established foreign
status gives you a TIN, use that number for purposes of backup
withholding and information reporting.
For more information on foreign payees, see the Instructions
for the Requester of Forms W-8BEN, W-8BEN-E, W-8ECI,
W-8EXP, and W-8IMY.
Names and TINs To Use
for Information Reporting
Show the full name and address as provided on Form W-9 on
the information return filed with the IRS and on the copy
furnished to the payee. If the payee has marked their address
“NEW”, you should update your records. If you made payments
to more than one payee or the account is in more than one
name, enter on the first name line of the information return only
the name of the payee whose TIN is shown on Form W-9. You
may show the names of any other individual payees in the area
below the first name line on the information return. Forms W-9
showing an ITIN must have the name exactly as shown on
line 1a of the Form W-7 application. If you are a PFFI reporting a
U.S. account on Form 8966, FATCA Report, and the account is
jointly held by U.S. persons, file a separate Form 8966 for each
holder.
For more information on the names and TINs to use for
information reporting, see section J of the General
Instructions for Certain Information Returns.
Notices From the IRS
The IRS will send you a notice if the payee's name and TIN on
the information return you filed do not match the IRS's records.
(See Taxpayer Identification Number (TIN) Matching, next.) If
you receive a backup withholding notice, you may have to send
a “B” notice to the payee to solicit another TIN. Pub. 1281,
Backup Withholding for Missing and Incorrect Name/TIN(s),
contains copies of the two types of “B” notices. If you receive a
penalty notice, you also may have to send a solicitation to the
payee. See Pub. 1586, Reasonable Cause Regulations and
Requirements for Missing and Incorrect Name/TINs.
Taxpayer Identification Number (TIN)
Matching
TIN Matching allows a payer or authorized agent who is required
to file Forms 1099-B, DIV, INT, K, MISC, OID, and/or PATR to
match TIN and name combinations with IRS records before
submitting the forms to the IRS. TIN Matching is one of the
e-services products that is offered and is accessible through the
IRS website. Go to IRS.gov and enter “e-services” in the search
box. It is anticipated that payers who validate the TIN and name
combinations before filing information returns will receive fewer
backup withholding (CP2100) notices and penalty notices.
Additional Information
For more information on backup withholding, see Pub. 1281.
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