W-8 vs. W-9: Forms, Withholding Rates, and Validity

The choice between a W-8 and a W-9 comes down to one question: are you a U.S. person for tax purposes? If yes, you give the payer a W-9. If no, you give the payer one of the W-8 forms. Both go to the payer, not the IRS, and the payer uses your form to decide how much tax to withhold and what to report at year-end. Get it wrong or skip it altogether, and the payer must withhold either 24% (on U.S. persons) or 30% (on foreign persons) from what you’re paid.¹²

Are You a U.S. Person or a Foreign Person

The tax code defines a U.S. person as a citizen or resident of the United States, a domestic partnership or corporation, certain estates, and certain domestic trusts.³ Anyone else is a foreign person, including nonresident aliens, foreign corporations, and foreign partnerships.⁴

“Foreign” here is a tax label, not a citizenship label. A German citizen living and working in the U.S. full-time may qualify as a U.S. resident alien and file a W-9. A U.S.-born person who moved abroad permanently and gave up residency might need a W-8.

Individuals

If you’re a U.S. citizen or a lawful permanent resident (green card holder), you’re automatically a U.S. person and file a W-9.⁵

If you’re neither, the substantial presence test decides. Count all your U.S. days in the current year, one-third of the days from the prior year, and one-sixth of the days from two years back. If that weighted total hits 183 and you were present at least 31 days in the current year, you’re a resident alien and file a W-9.⁶

There’s an exception. Even if the weighted total reaches 183, you can still be treated as a nonresident alien if you were present fewer than 183 days in the current year, kept a tax home in a foreign country all year, and had a closer connection to that country than to the United States. You claim the exception by filing Form 8840. The IRS weighs factors like where your permanent home, family, and belongings are, where you vote, and where you hold a driver’s license.⁷

Entities

For businesses, the test is where you were legally formed. An LLC organized in Delaware is a domestic entity that files a W-9 regardless of who owns it or where it operates. A corporation organized in Canada is a foreign entity that files a W-8, even if all its customers are in the U.S.⁸

What the W-9 Does

The W-9, “Request for Taxpayer Identification Number and Certification,” collects three things: your name, your Taxpayer Identification Number (usually a Social Security Number for individuals), and your signed certification that the information is correct. You give it to the payer, who uses your TIN to issue any Form 1099 at year-end.⁸⁹

A properly completed W-9 also prevents backup withholding. Without one, the payer must withhold 24% from every reportable payment and send it to the IRS on your behalf. You also certify on the W-9 that the IRS hasn’t previously notified you about underreporting interest or dividend income, which is another backup withholding trigger.¹⁰

Some entities are exempt from backup withholding entirely and mark this on Line 4 of the W-9 with a numeric code. Corporations use code 5, tax-exempt organizations under section 501(a) use code 1, and government agencies use codes 2 through 4. Other exempt payees include registered securities dealers, real estate investment trusts, and financial institutions.⁸

What the W-8 Forms Do

Foreign persons don’t file a W-9. They submit one of the W-8 forms to certify foreign status and, if eligible, claim a reduced withholding rate or full exemption under a tax treaty.¹¹ Without a valid W-8, the default withholding rate on U.S.-sourced income paid to a foreign person is 30%.¹

There are five W-8 forms plus a related Form 8233. Which one you need depends on what kind of payee you are and what kind of income you’re receiving.

W-8BEN for Foreign Individuals

This is the most common W-8. Individual foreign beneficial owners use it to establish they aren’t U.S. persons and, when eligible, to claim treaty benefits that reduce withholding on dividends, interest, royalties, and similar income. You have to provide the form to the withholding agent even if you aren’t claiming any reduced rate. To claim treaty benefits, complete Part II with your country of residence and the specific treaty article that provides the reduced rate.¹

W-8BEN-E for Foreign Entities

Foreign entities use the W-8BEN-E. The form does the same job as the individual version but adds a FATCA layer: the entity must identify its classification under Chapter 4 (participating foreign financial institution, passive entity with U.S. owners, exempt beneficial owner, and so on). Without properly documenting that status, the entity faces 30% withholding on “withholdable payments.” The form runs nearly 30 parts, and the entity completes only the one matching its status. Foreign entities that aren’t sure which category applies often need professional help.¹²

W-8ECI for Effectively Connected Income

If your income is effectively connected with a U.S. trade or business, file the W-8ECI instead of the W-8BEN. Effectively connected income is taxed on a net basis at graduated rates (income minus deductions), similar to a U.S. person’s income, rather than at the flat 30% rate on gross amounts that applies to most other U.S.-sourced payments to foreign persons. A foreign consultant operating through a U.S. office would typically file a W-8ECI for that income.¹

W-8IMY for Intermediaries and Flow-Through Entities

The W-8IMY isn’t filed by the person who ultimately gets the income. It’s filed by middlemen: foreign intermediaries, foreign partnerships, foreign trusts, and certain U.S. branches that receive payments on behalf of others. These filers attach a withholding statement identifying the actual beneficial owners and their respective W-8 forms.¹³

W-8EXP for Governments and Tax-Exempt Organizations

Foreign governments, international organizations, and foreign tax-exempt organizations use the W-8EXP to claim withholding exemptions. A foreign government’s investment income from U.S. stocks, bonds, and bank deposits is generally exempt, though income from commercial activities does not qualify. Foreign private foundations face a reduced 4% withholding rate on gross investment income instead of the standard 30%.¹⁴

Form 8233 for Personal Services

Nonresident aliens claiming a treaty exemption on compensation for personal services use Form 8233 rather than a W-8BEN. This applies to independent contractors and, in some cases, employees whose treaty specifically exempts their compensation. The form is narrower than the W-8BEN and covers service income only.¹⁵

The Two Withholding Rates

The tax code runs two different withholding regimes, one for foreign persons and one for U.S. persons. Mixing them up is where mistakes get expensive.

When a foreign person receives U.S.-sourced income (dividends, interest, rents, royalties), the payer must withhold 30% of the gross payment unless the payee provides a valid W-8 claiming a treaty reduction or exemption.¹⁶ A valid W-8BEN citing an applicable treaty may reduce that rate to 15%, 10%, or even 0%, depending on the income type and the treaty. Without the form, the full 30% comes off the top.

U.S. persons who fail to provide a valid W-9, or whose TIN doesn’t match IRS records, face backup withholding at a flat 24% on reportable payments. The IRS can also direct a payer to begin backup withholding after notifying a payee four times over at least 120 days about underreported interest or dividend income. Either way, the withheld amount shows up on your Form 1099 and you claim it as a credit on your tax return.²

How Long Each Form Stays Valid

A W-9 stays valid indefinitely. You submit a new one only when something changes, such as your name, TIN, or business structure (say, a switch from a C corporation to an S corporation).⁸

A W-8BEN, and most other W-8 forms, expires on the last day of the third calendar year after the year you signed it. A form signed at any point in 2026 expires December 31, 2029. Under certain conditions the form can remain in effect indefinitely until a change of circumstances, but the three-year rule is the general default.¹

If anything on your W-8 becomes inaccurate before it expires, you have 30 days from the change to submit a corrected form. Moving to a different country, for example, invalidates your existing W-8BEN because the treaty claim is tied to your country of residence. Miss the 30-day window and the payer reverts to 30% withholding until a new valid form is on file.¹

Getting a U.S. TIN as a Foreign Person

Foreign individuals and entities sometimes need a U.S. taxpayer identification number to complete a W-8, especially when claiming treaty benefits. The type of TIN depends on the payee.

Foreign individuals who aren’t eligible for a Social Security Number apply for an Individual Taxpayer Identification Number (ITIN) using Form W-7. The application requires proof of both identity and foreign status. A valid passport is the simplest option because it satisfies both requirements on its own. Without a passport, you need two documents: one proving identity and one proving foreign status. Acceptable documents include a national identification card, foreign voter registration card, visa, or USCIS photo ID. All documents must be originals or certified copies from the issuing agency; notarized copies aren’t accepted.¹⁷

Foreign entities that need a U.S. Employer Identification Number apply on Form SS-4. Foreign applicants without an address, office, or agent in the U.S. can’t use the online EIN application. They apply by phone, fax, or mail instead. Calling 267-941-1099 (not toll-free) during business hours is the fastest route and can produce an EIN during the call. Faxing the completed SS-4 to the IRS international line typically returns an EIN within four business days. Mail applications take four to five weeks.¹⁸

W-8 vs. W-9 at a Glance

Who files: W-9 is for U.S. persons (citizens, resident aliens, domestic entities). W-8 forms are for foreign persons (nonresident aliens, foreign entities).
Purpose: W-9 provides a TIN for 1099 reporting and prevents 24% backup withholding. W-8 certifies foreign status and can reduce or eliminate 30% Chapter 3 withholding.
Expiration: W-9 has no set expiration. W-8BEN expires at the end of the third calendar year after signing.
Default withholding without the form: 24% for U.S. persons missing a W-9; 30% for foreign persons missing a W-8.
Filed with: Both go to the payer or withholding agent, not directly to the IRS.
Update deadline: W-9 only when information changes; W-8 within 30 days of any change in circumstances.

If you’re a payee and realize you filed the wrong form, correct it with the payer immediately rather than waiting for a withholding problem to surface on your tax return. Recovering over-withheld tax means filing a U.S. return and claiming a refund, which for foreign persons can take months.

1
Internal Revenue Service. Instructions for Form W-8BEN (10/2021)
2
Internal Revenue Service. Topic No. 307, Backup Withholding
3
Legal Information Institute. 26 U.S. Code 7701(a)(30) – Definition of United States Person
4
Internal Revenue Service. Foreign Persons
5
Internal Revenue Service. Determining an Individuals Tax Residency Status
6
Internal Revenue Service. Publication 519 (2025), U.S. Tax Guide for Aliens
7
Internal Revenue Service. Closer Connection Exception to the Substantial Presence Test
8
Internal Revenue Service. Form W-9 (Rev. March 2024)
9
Internal Revenue Service. About Form W-9, Request for Taxpayer Identification Number and Certification
10
Internal Revenue Service. Backup Withholding
11
Internal Revenue Service. About Form W-8 BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals)
12
Internal Revenue Service. Instructions for Form W-8BEN-E (10/2021)
13
Internal Revenue Service. Form W-8IMY (Rev. October 2021)
14
Internal Revenue Service. Instructions for Form W-8EXP
15
Internal Revenue Service. About Form 8233, Exemption From Withholding on Compensation
16
Office of the Law Revision Counsel. 26 USC Chapter 3 – Withholding of Tax on Nonresident Aliens and Foreign Corporations
17
Internal Revenue Service. ITIN Supporting Documents
18
Internal Revenue Service. Instructions for Form SS-4