W-9 and W-8BEN basics

When you pay contractors, you need tax documentation. For U.S.-based contractors, that's a W-9. For international contractors, it's typically a W-8BEN. These forms tell you (and the IRS) who you're paying and whether you need to withhold taxes or issue year-end tax forms.

This is a practical overview of when to collect each form, what information they contain, and how to store them properly. Not legal or tax advice—use this to inform conversations with your accountant or tax advisor.

W-9: For U.S. contractors

A W-9 (Request for Taxpayer Identification Number and Certification) is a form you collect from U.S.-based contractors before you pay them. It provides their legal name, business name (if applicable), taxpayer identification number (TIN), and tax classification (individual, LLC, corporation, etc.).

You need a W-9 from any U.S. contractor you pay $600 or more in a calendar year. The information on the W-9 is used to prepare Form 1099-NEC at year-end, which reports the total amount you paid to that contractor. You file the 1099-NEC with the IRS and send a copy to the contractor.

The W-9 itself is not filed with the IRS—you keep it in your records. It's your documentation that you collected the contractor's TIN and can issue a 1099-NEC accurately.

W-8BEN: For international contractors

A W-8BEN (Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting) is a form you collect from non-U.S. contractors (foreign individuals). It certifies that the contractor is not a U.S. person and may be eligible for reduced or exempt withholding under a tax treaty.

Without a W-8BEN, you may be required to withhold 30% of payments to foreign contractors and remit it to the IRS. With a valid W-8BEN, the contractor certifies their foreign status, and you typically don't withhold (assuming the payment is for services performed outside the U.S.).

Like the W-9, you keep the W-8BEN in your records—you don't file it with the IRS. It's your documentation that the contractor is foreign and you're not required to withhold or issue a 1099.

W-9 vs W-8BEN: Quick comparison

The rule of thumb: if the contractor is based in the U.S., collect a W-9. If they're based outside the U.S., collect a W-8BEN. If you're unsure, ask the contractor where they're tax-resident.

When to collect these forms

Collect W-9 or W-8BEN forms before you make the first payment to a contractor. This ensures you have the documentation on file from the start and can issue accurate year-end tax forms if needed.

Many businesses collect these forms during contractor onboarding, along with the service agreement and other documentation. This creates a complete record and avoids scrambling for tax forms at year-end.

If you're already working with a contractor and don't have their W-9 or W-8BEN on file, request it now. You'll need it for year-end reporting, and it's easier to collect mid-year than in December when everyone is busy.

What information you need

W-9 requires: Legal name, business name (if different), tax classification (individual, sole proprietor, LLC, corporation, etc.), address, and taxpayer identification number (Social Security Number or Employer Identification Number).

W-8BEN requires: Legal name, country of citizenship, permanent residence address, date of birth, foreign tax identification number (if applicable), and tax treaty claim (if applicable).

Both forms require a signature and date. The signature certifies that the information is accurate and that the contractor is not subject to backup withholding (W-9) or is a foreign person (W-8BEN).

Record-keeping and storage

You don't file W-9 or W-8BEN forms with the IRS—you keep them in your records. Store them securely, as they contain sensitive information (TINs, addresses, dates of birth).

W-9 retention: Keep W-9 forms for at least 4 years after the last 1099-NEC you issued to that contractor. This aligns with IRS record-keeping requirements for employment tax documents.

W-8BEN retention: Keep W-8BEN forms for as long as you're paying the contractor, plus 3 years after the last payment. W-8BEN forms expire after 3 years, so you may need to collect updated forms from long-term contractors.

Many businesses store these forms digitally in secure cloud storage or contractor management software. This makes them easy to access for year-end reporting and ensures they're backed up.

Common mistakes to avoid

Not collecting forms before payment. If you pay a contractor without a W-9 or W-8BEN on file, you may be required to withhold backup withholding (24% for missing W-9) or foreign withholding (30% for missing W-8BEN). Collect forms first.

Using the wrong form. Don't collect a W-9 from a foreign contractor or a W-8BEN from a U.S. contractor. Ask where they're tax-resident and use the appropriate form.

Not updating expired W-8BEN forms. W-8BEN forms expire after 3 years. If you're still working with a contractor after 3 years, collect a new W-8BEN to keep your records current.

Not storing forms securely. W-9 and W-8BEN forms contain sensitive information. Store them in a secure location with access controls, not in shared folders or email.

Year-end reporting

At year-end, you use the information from W-9 forms to prepare 1099-NEC forms for U.S. contractors you paid $600 or more. You file 1099-NEC forms with the IRS by January 31 and send copies to contractors.

For foreign contractors with W-8BEN forms on file, you typically don't issue 1099 forms (assuming the services were performed outside the U.S.). The W-8BEN is your documentation that the contractor is foreign and not subject to 1099 reporting.

If you paid a foreign contractor for services performed in the U.S., or if you withheld taxes, you may need to file Form 1042 and 1042-S. Consult your accountant if you're unsure about reporting requirements for foreign contractors.

Practical workflow

Here's a simple workflow for collecting and managing W-9 and W-8BEN forms:

1. During onboarding: Ask new contractors where they're tax-resident. If U.S., send a W-9. If foreign, send a W-8BEN. Collect the completed form before the first payment.

2. Store securely: Save the completed form in a secure location (encrypted cloud storage, contractor management software, or locked file cabinet). Ensure only authorized personnel can access it.

3. Track expiration: For W-8BEN forms, note the expiration date (3 years from signature). Set a reminder to collect a new form before it expires if you're still working with the contractor.

4. Year-end reporting: In January, review all W-9 forms and prepare 1099-NEC forms for contractors you paid $600 or more. File with the IRS and send copies to contractors by January 31.

The bottom line

W-9 and W-8BEN forms are basic tax documentation for contractor payments. Collect the right form (W-9 for U.S. contractors, W-8BEN for foreign contractors) before you make the first payment. Store forms securely and keep them for the required retention period.

This isn't complicated, but it's important. Having proper tax documentation protects you from withholding requirements, makes year-end reporting straightforward, and ensures you're compliant with IRS rules.

If you're managing multiple contractors, use contractor management software to collect, store, and track these forms automatically. It's easier than spreadsheets and ensures nothing falls through the cracks.