If a business, bank, or closing agent asks you to fill out a W-9 and you’re a U.S. person receiving a reportable payment, yes — you have to fill out the W-9. Federal law requires you to furnish your taxpayer identification number to anyone who must report payments made to you on an information return.1Office of the Law Revision Counsel. 26 USC 6109 – Identifying Numbers Form W-9 is the standard way that number changes hands.2Internal Revenue Service. About Form W-9, Request for Taxpayer Identification Number and Certification Refuse, and the payor must start withholding 24% of every payment to you and send it to the IRS, and the IRS can add a $50 penalty for each failure on top of that.
Who Can Legitimately Ask You for a W-9
The trigger is always the same: someone expects to report a payment they made to you, and they need your identifying information to do it correctly. The common situations:
- A client hiring you for freelance or contract work. Starting in 2026, the reporting threshold for nonemployee compensation on Form 1099-NEC rose from $600 to $2,000 and will adjust for inflation in future years. A business often requests a W-9 before it knows how much it will pay you, so expect the ask even for smaller jobs.3Internal Revenue Service. Publication 15 (2026), (Circular E), Employers Tax Guide
- A bank or brokerage opening an account. Financial institutions need your TIN to report interest on Form 1099-INT and dividends on Form 1099-DIV.4Internal Revenue Service. Instructions for Forms 1099-INT and 1099-OID (01/2024)
- A closing agent when you sell real estate, so gross proceeds can be reported on Form 1099-S.5Internal Revenue Service. Instructions for Form 1099-S (04/2025)
- A corporation paying you dividends of $10 or more, which get reported on Form 1099-DIV.6Internal Revenue Service. Instructions for Form 1099-DIV (01/2024)
- An attorney settling a case, a landlord paying you for work on their property, a prize sponsor, or a lender who cancels a debt.
If the person asking has no reportable payment to make, there’s no legal basis for the request. A W-9 collected outside that context is just a paper form. But when the requester genuinely needs to file an information return, your obligation to provide the TIN is statutory.
When You Should Not Fill Out a W-9
Two situations look like W-9 territory but call for a different form.
If you’re a traditional employee receiving a regular paycheck with taxes already withheld, you fill out Form W-4 for your employer, not a W-9. Your wages get reported on Form W-2 at year-end. A W-9 is for people receiving payments without tax withheld: independent contractors, freelancers, and other non-employees who get a 1099. If you work a day job and also freelance on the side, you’ll fill out both — a W-4 for the employer and a W-9 for each freelance client.
Form W-9 is also only for U.S. persons, meaning U.S. citizens, resident aliens, and domestic entities.7Internal Revenue Service. Instructions for the Requester of Form W-9 (03/2024) If you’re a foreign individual who isn’t a U.S. tax resident, you provide Form W-8BEN instead.8Internal Revenue Service. About Form W-8 BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals) Foreign persons engaged in a U.S. trade or business with effectively connected income use Form W-8ECI. If someone hands you a W-9 and you aren’t a U.S. person for tax purposes, don’t sign it. Ask for the correct W-8.
What Happens If You Refuse or Give False Information
The consequences arrive faster than most people expect, and they stack.
Automatic 24% Backup Withholding
The first hit is immediate. If you don’t provide a valid TIN, or the IRS notifies the payor that the TIN you gave is wrong, the payor must withhold 24% of every reportable payment and send it directly to the IRS.9Office of the Law Revision Counsel. 26 USC 3406 – Backup Withholding The 24% rate is confirmed for 2026.3Internal Revenue Service. Publication 15 (2026), (Circular E), Employers Tax Guide It applies to interest, dividends, and nonemployee compensation, and it keeps running until you provide a correct TIN and the IRS releases the hold.
The withheld amount isn’t an extra tax. You get credit for it when you file your return. In the meantime, though, nearly a quarter of your income is locked up with the IRS, which is a real cash-flow problem for a contractor working on tight margins.
$50 Civil Penalty per Failure
Separate from the withholding, the IRS can assess a $50 penalty for each failure to furnish your TIN when required, up to $100,000 in a calendar year.10Office of the Law Revision Counsel. 26 USC 6723 – Failure to Comply With Other Information Reporting Requirements The penalty can be waived for reasonable cause, but not liking the request doesn’t count.
A separate $500 penalty applies if you falsely certify on the W-9 that you’re not subject to backup withholding when you have no reasonable basis for that claim — for example, telling a payor you’re clear when the IRS has already notified you otherwise.11Office of the Law Revision Counsel. 26 USC 6682 – False Information With Respect to Withholding
Criminal Liability for Fake TINs
Part II of the W-9 is a certification signed under penalty of perjury. Willfully providing a fake TIN or lying on the certification is a felony, punishable by a fine of up to $100,000 ($500,000 for a corporation) and up to three years in prison.12Office of the Law Revision Counsel. 26 USC 7206 – Fraud and False Statements Prosecution for a bad W-9 alone is rare, but it does happen when fabricated TINs are part of a larger fraud investigation.
What Happens After You Submit It: B-Notices
Providing a W-9 isn’t the end of the exposure if the information doesn’t match IRS records. When the name and TIN on your W-9 don’t match, the IRS sends the payor a CP2100 or CP2100A notice, commonly called a “B-Notice,” listing the mismatches. These go out twice a year, in October and the following April.13Internal Revenue Service. Understanding Your CP2100 or CP2100A Notice
After a first B-Notice, the payor sends you a letter asking for a fresh W-9 with correct information. If you respond with a valid TIN, the payor must stop backup withholding within 30 days.13Internal Revenue Service. Understanding Your CP2100 or CP2100A Notice If you get a second B-Notice, a new W-9 by itself isn’t enough. You’ll need to send a copy of your Social Security card or an IRS Letter 147C verifying your name and EIN.14Internal Revenue Service. Backup Withholding B Program
Ignoring a B-Notice is how a fixable problem turns into a large one. The 24% withholding keeps coming out, and the payor has no discretion to stop it until you supply what the IRS wants.
When to Send an Updated W-9
A W-9 doesn’t expire on a set schedule, but a few changes require you to send a new one to every payor holding your old form:
- Your legal name changes, or your TIN changes for any reason. The same applies when a grantor trust’s grantor dies and the trust gets a new TIN.15Internal Revenue Service. Form W-9 (Rev. March 2024) – Request for Taxpayer Identification Number and Certification
- Your tax classification changes — a C corporation elects S corporation status, for example, or your entity type shifts in any way that affects how income is reported.15Internal Revenue Service. Form W-9 (Rev. March 2024) – Request for Taxpayer Identification Number and Certification
- You previously claimed an exemption from backup withholding but no longer qualify.15Internal Revenue Service. Form W-9 (Rev. March 2024) – Request for Taxpayer Identification Number and Certification
Payors also sometimes ask for a fresh W-9 every few years just to keep their records current. Comply promptly to avoid any withholding hiccups.
Handing Over Your Information Safely
A completed W-9 carries either your Social Security Number or your EIN, so how you send it matters. Encrypted email, password-protected files, or a secure upload portal are reasonable. An unencrypted email attachment with your SSN in plain view is not.
If you’re a sole proprietor and want to avoid putting your SSN on every W-9 you sign, you can apply for an EIN through the IRS for free and use that instead.16Internal Revenue Service. Get an Employer Identification Number Note that a single-member LLC treated as a disregarded entity generally has to use the owner’s SSN or EIN for information reporting, not the LLC’s own EIN.17Internal Revenue Service. Single Member Limited Liability Companies
You never send the W-9 to the IRS yourself. It stays with the payor, who uses it to prepare 1099s at year-end.2Internal Revenue Service. About Form W-9, Request for Taxpayer Identification Number and Certification Keep your own record of who has a W-9 from you and when you sent it, so you can trace back quickly if a B-Notice or a mystery deduction ever shows up.