Contractor tax forms, at a glance
Know when to collect W-9 or W-8BEN and how to store them. Informational only—consult your tax advisor.
Disclaimer: This is informational content, not tax or legal advice. Consult a qualified tax advisor or attorney for guidance specific to your situation.
US basics
If you're a US company paying contractors, you typically need to collect tax forms to report payments to the IRS.
When to collect forms
- US contractors: Collect W-9 if you expect to pay $600+ in a calendar year
- Non-US contractors: Collect W-8BEN or W-8BEN-E to claim treaty benefits or exemptions
- Reporting threshold: File 1099-NEC for US contractors paid $600+ annually
The $600 threshold applies per contractor per year. If you pay someone $599, no 1099 is required. At $600 or more, you must file.
Form uses
Each form serves a specific purpose. Here's what you need to know about the most common contractor tax forms.
| Form | Who provides it | Purpose | When to collect |
|---|---|---|---|
| W-9 | US contractors | Provides TIN for 1099 reporting | Before first payment |
| W-8BEN | Non-US individuals | Claims treaty benefits, certifies foreign status | Before first payment |
| W-8BEN-E | Non-US entities | Claims treaty benefits for companies | Before first payment |
| 1099-NEC | You (the payer) | Reports payments to IRS and contractor | By Jan 31 for prior year |
W-9 and W-8BEN forms are provided by the contractor to you. You use the information to file 1099-NEC forms with the IRS and send copies to contractors.
Storage & renewal reminders
Keep tax forms secure and up to date. Here's a practical workflow for managing contractor tax documentation.
Storage best practices
- Collect before first payment: Don't pay until you have the form on file
- Store securely: Use encrypted storage or a secure document management system
- Retention period: Keep forms for at least 4 years (IRS audit window)
- W-8BEN renewal: Valid for 3 years; set reminders to request updated forms
- Access control: Limit access to finance and compliance team members only
W-8BEN forms expire after 3 years or when circumstances change (e.g., contractor moves to the US). Set calendar reminders to request renewals 30 days before expiration.
Renewal workflow
- Set reminder for 30 days before W-8BEN expiration
- Email contractor with new blank form and instructions
- Receive completed form and verify information
- Store new form and archive the old one
- Update your records with the new expiration date
Disclaimers
Tax rules vary by jurisdiction and change frequently. This guide provides general information only.
- Not tax advice: Consult a qualified tax advisor or CPA for guidance specific to your situation
- Not legal advice: Tax compliance intersects with legal requirements; consult an attorney when needed
- Rules change: IRS rules and thresholds may change; verify current requirements with official sources
- State requirements: Some states have additional reporting requirements beyond federal 1099s
- International complexity: Cross-border payments may involve withholding, treaties, and local tax obligations
Frequently asked questions
What if a contractor refuses to provide a W-9 or W-8BEN?
You may be required to withhold backup withholding (24% for US contractors) or 30% for non-US contractors without a valid W-8BEN. Consult your tax advisor before making payments without proper forms.
Do I need to collect forms from contractors paid less than $600?
It's not required for 1099 reporting, but it's good practice to collect forms from all contractors at onboarding. This way, if payments exceed $600 later, you already have the documentation.
What's the difference between W-8BEN and W-8BEN-E?
W-8BEN is for individuals (sole proprietors, freelancers). W-8BEN-E is for entities (companies, LLCs, partnerships). Use the form that matches the contractor's legal structure.
Can I use electronic signatures for tax forms?
Yes, the IRS accepts electronic signatures on W-9 and W-8BEN forms, provided you follow their guidelines for electronic signature systems. Most document management platforms support compliant e-signatures.
What if a contractor's information changes mid-year?
Request an updated form immediately. For example, if a contractor moves from the US to another country, you'll need a new W-8BEN instead of the W-9. Use the updated information for future payments and 1099 reporting.