Finance term
Form W-9 (Taxpayer Identification)
Also known as: IRS W-9, W-9 form
Definition
IRS Form W-9 is used to collect a taxpayer's legal name, business name, entity type, and Taxpayer Identification Number (TIN or EIN) — required before a business can issue a 1099 or open most business credit accounts.
Detailed explanation
Form W-9 is an IRS information request form (Request for Taxpayer Identification Number and Certification) that businesses use to collect identity and tax information from vendors, contractors, and service providers before payment. The W-9 is not submitted to the IRS — it is retained by the requesting business, which uses the information to complete 1099 forms at year-end.
For business credit and financing: banks, credit unions, equipment lenders, and many alternative lenders request a completed W-9 as part of onboarding. The EIN on the W-9 links the legal entity to credit bureau files (D&B, Experian Business, Equifax Business), which is how business credit history is built. An incomplete or inconsistent W-9 — where the business name, EIN, and legal entity type don't match IRS records — can cause backup withholding (28%) on payments made to you.
For self-employed individuals without an EIN, the W-9 may use the owner's Social Security Number (SSN) as the TIN, though obtaining an EIN (which is free via IRS.gov) is recommended for separating personal and business identity.
◈ Worked example
- A marketing agency onboards a new freelance designer. Before issuing first payment, they collect a W-9 to obtain the designer's SSN or EIN for year-end 1099-NEC filing.
- A business opens a vendor credit account. The vendor requests a W-9 to verify EIN, legal name, and entity type before extending net-30 terms.
- A bank requests a W-9 as part of business checking account onboarding — matches EIN to IRS records to satisfy Know Your Customer (KYC) requirements.
Common questions
The most-asked questions about Form W-9 (Taxpayer Identification) — answered straightforwardly.
Why is a W-9 required before I can be paid? +
Businesses paying $600+ to contractors are required to file 1099-NEC. To do that accurately, they need your legal name, TIN/EIN, and entity type — all collected via W-9. Without it, they must apply 28% backup withholding to your payments and remit it to the IRS.
Should I use my SSN or EIN on a W-9? +
If you have an EIN for your business (sole proprietorship, LLC, S-corp, etc.), use it. This separates your business identity from your personal SSN, reduces identity-theft exposure, and builds your business credit profile. If you don't have an EIN, apply for one free at IRS.gov — takes about 15 minutes.
Does the W-9 get sent to the IRS? +
No. The W-9 is retained by the requesting party. Your information is used to prepare 1099 forms, which are then filed with the IRS. The W-9 itself never goes to the IRS.
Further reading
This glossary entry is educational content. ClearValue Lending is a business & personal financing platform — not a lender, broker, or financial advisor. Specific product terms vary by lender; verify with the lender or issuer before applying. See privacy policy.