W-9 vs W-8BEN vs W-8BEN-E: which formChecked do you need?

A designer in Brisbane lands her first US client. The onboarding email asks her to "fill out a W-9". Meanwhile, a bookkeeper in Ohio is onboarding twelve contractors, four of them overseas, and isn't sure which ones should get which form. Both are asking the same question from opposite ends: which tax form is right for this person?

The short answer depends on one thing: whether the person being paid is a US person. This guide explains the W-9, W-8BEN, W-8BEN-E and W-8ECI using the IRS's own wording. It's general information, not tax advice. A tax professional can advise on your situation, including any treaty claim.

Who gives which form? The short answer

US persons give a W-9. Foreign individuals give a W-8BEN. Foreign entities give a W-8BEN-E. Foreign persons whose income is effectively connected with a US trade or business generally give a W-8ECI. In every case, the form goes to the person paying you, not to the IRS.

The last two rows are edge cases, straight from the W-8BEN instructions' list of who should not use W-8BEN.

What is Form W-9 for?

The IRS says to use Form W-9 "to provide your correct Taxpayer Identification Number (TIN) to the person who is required to file an information return with the IRS." The payer needs your TIN to report what they paid you, for example on a Form 1099. You give it to them, and they keep it.

Key lines from the form itself:

• Who uses it: "Use Form W-9 only if you are a U.S. person (including a resident alien), to provide your correct TIN."
• Where it goes: "Give form to the requester. Do not send to the IRS."
• What signing certifies: that your TIN is correct, that you're not subject to backup withholding (or are exempt), that you're a US person, and that any FATCA exemption code is correct.

The W-9 defines a US person as an individual who is a US citizen or US resident alien; a partnership, corporation, company or association created or organised in the US or under US law; an estate (other than a foreign estate); or a domestic trust.

What is Form W-8BEN for, and who shouldn't use it?

It's for foreign individuals. The IRS says: "You must give Form W-8BEN to the withholding agent or payer if you are a nonresident alien who is the beneficial owner of an amount subject to withholding." Submit it when asked, "whether or not you are claiming a reduced rate of, or exemption from, withholding."

The W-8BEN does two jobs. It establishes that you're a foreign person, and, if your country has an income tax treaty with the US and you're eligible, it lets you claim a reduced rate of, or exemption from, withholding under that treaty.

Don't use W-8BEN if, per the IRS instructions:

1. You're a foreign entity: use W-8BEN-E.
2. You're a US citizen ("even if you reside outside the United States") or other US person, including a resident alien: use W-9.
3. You're acting as a foreign intermediary: use W-8IMY.
4. You're a nonresident alien claiming exemption on compensation for personal services performed in the US: use Form 8233 or W-4.
5. Your income is effectively connected with a US trade or business (unless allocated through a partnership): use W-8ECI.
6. You're the trustee of a foreign trust: use W-8BEN-E or W-8IMY for the trust.

What if you don't provide it? The instructions say the withholding agent "may have to withhold at the 30% rate (under chapters 3 and 4), backup withholding rate, or the rate applicable under section 1446." Give it before you're paid.

What about W-8BEN for freelancers in Australia?

If you're an Australian resident individual, not a US citizen or resident, and a US client pays you, the W-8BEN is usually the form they'll ask for. Australia is on the IRS's list of countries with a US income tax treaty, so you may be able to claim treaty benefits on the form if you're eligible.

How the form handles that, from the instructions:

• Line 2, citizenship. Dual citizens enter the country where they're both a citizen and a resident. A US citizen "should not complete this form even if you hold citizenship in another jurisdiction."
• Line 3, permanent residence address. The address in the country where you're resident for income tax. No PO box, bank or mail-only address.
• Lines 5 and 6, tax ID. To claim certain treaty benefits, give a US SSN or ITIN on line 5, or your foreign TIN on line 6.
• Line 9, treaty country. The country where you're resident for treaty purposes.
• Line 10. Only for treaty claims with extra conditions, such as some royalties or business profits not attributable to a permanent establishment.

We won't suggest which treaty article or rate applies to your income; that depends on the type of payment and your circumstances. Read the treaty documents on the IRS treaty page (opens in a new tab) or ask a tax professional.

W-8BEN-E and W-8ECI: the entity and effectively-connected cases

W-8BEN-E is the entity version: the IRS says it's "used by foreign entities to document their status for purposes of chapter 3 and chapter 4." W-8ECI is for a foreign person who is the beneficial owner of US-source income that is, or is deemed to be, effectively connected with a US trade or business.

W-8BEN vs W-8BEN-E. The deciding question is whether the payee is an individual or an entity. A foreign Pty Ltd, GmbH or Ltd uses W-8BEN-E. An individual uses W-8BEN, including, generally, a foreign individual who is the single owner of a disregarded entity. The exception: if the disregarded entity is claiming treaty benefits as a hybrid entity, it completes W-8BEN-E.

W-8BEN vs W-8ECI. If your income is effectively connected with a US trade or business, a W-8BEN is the wrong form. The instructions say that if income on a W-8BEN "becomes effectively connected, this is a change in circumstances and Form W-8BEN is no longer valid with respect to such income. You must file Form W-8ECI."

Whether income is effectively connected is a technical tax question. If there's any chance it applies, get advice before the form is signed.

Who keeps the form?

The person paying you. All four forms are given to the requester, payer or withholding agent and stay in their records. The W-9 says "Do not send to the IRS." The W-8BEN instructions say: "Do not send Form W-8BEN to the IRS. Instead, give it to the person who is requesting it from you."

A few handling rules from the IRS instructions:

• One per payer. "Generally, a separate Form W-8BEN must be given to each withholding agent."
• One per income type, sometimes. A withholding agent may ask for a separate W-8BEN for each type of income you claim different benefits on.
• Joint owners. For joint accounts, every owner must give a W-8 for the account to be treated as foreign. If any joint owner gives a W-9, the payment is treated as made to a US person.
• Electronic signatures. "A withholding agent may allow you to provide this form with an electronic signature." It must show it was electronically signed by an authorised person, for example with a time and date stamp and a statement that it was e-signed. "Simply typing your name into the signature line is not an electronic signature."
• Electronic W-9s. Requesters may set up an electronic system for W-9s, but it must meet IRS requirements, including an electronic signature under penalties of perjury, and be able to supply a hard copy if the IRS asks.

How long is a W-8BEN valid?

Generally from the date it's signed "until the last day of the third succeeding calendar year, unless a change in circumstances makes any information on the form incorrect." The IRS example: a form signed on September 30, 2015 "remains valid through December 31, 2018." Under certain conditions, a W-8BEN stays in effect indefinitely until circumstances change.

So a form signed in January and one signed in December of the same year expire on the same day. A reminder a few months ahead gives payees time to re-sign.

The W-9 doesn't carry the same three-year rule in the instructions we reviewed, but a payer should request a new one whenever the payee's details change.

What should you do when circumstances change?

Tell the payer within 30 days and give them a new form. The W-8BEN instructions say: "If a change in circumstances makes any information on the Form W-8BEN you have submitted incorrect, you must notify the withholding agent, payer, or FFI … within 30 days of the change in circumstances and you must file a new Form W-8BEN or other appropriate form."

Changes the IRS calls out:

• Moving to a US address is a change in circumstances.
• Moving within your country, or to another foreign country, generally isn't, unless you're claiming treaty benefits, in which case moving to the US or out of the treaty country is.
• Becoming a US citizen or resident alien, including by meeting the substantial presence test: notify within 30 days, and you may need to give a W-9 instead.
• Income becoming effectively connected: switch to W-8ECI for that income.

Onboarding checklist for payers

Collect the right form before the first payment, check it's complete and signed, store it securely, and set a reminder for W-8 renewals. The usual slips are the wrong form for the person, a missing TIN, and an expired W-8BEN nobody noticed.

• Decide US person or foreign person first, then pick the form from the table above
• Individual or entity? W-8BEN for individuals, W-8BEN-E for entities
• Form received before the first payment
• Signed and dated by the payee (or an authorised agent with power of attorney)
• TIN or foreign TIN present where the form requires it
• Treaty claim lines complete, if a treaty rate is claimed
• Stored securely: these forms hold tax IDs and addresses
• W-8BEN renewal date recorded (December 31 of the third year after signing)
• Process for payees to report changes within 30 days

How do you collect these forms from many contractors?

Send each contractor the right form, pre-filled with what you already know, and collect signatures in one pass. For a handful of payees, email works. For dozens, you want each form tracked, signed, and stored where you can find it at renewal time.

AppliFlo's PDF & Word forms includes the W-9, W-8BEN, W-8BEN-E and W-8ECI in its library of 54 official forms, and official forms never use AI pages. Sign can bulk-send one form to many contractors, each with their own envelope, and every signed PDF gets a PAdES seal, a certificate of completion and an audit trail showing who signed, when and from which IP address. Whether that meets your own requirements for accepting electronically signed W-8s and W-9s is the withholding agent's call under the IRS rules above, so check with your tax adviser.

Accounting practices can see how this fits a busy season on the accounting and tax page and in our tax-season paperwork playbook. If you also need authority to deal with the IRS for a client, read Form 2848 vs 8821 next.