W-9 Form Explained for Contractors and Locums

A W-9 is the least dramatic tax form you will ever sign, and one of the easiest to get wrong in a way that costs real money. It exists for one purpose: the business paying you needs your legal name, taxpayer identification number, and tax classification on file so it can report what it paid you to the IRS.

For a 1099 contractor or a locum physician picking up assignments through an agency, the W-9 is the first document in the compliance trail. What you put on it determines whose tax return the income lands on, whether the 1099 arrives with the right name and number, and whether the payer is forced to start withholding 24% from your checks.

This guide covers each line of the form, the entity questions that trip people up, and what to do in the weeks after you submit it, because the W-9 is the start of your tax year, not a piece of paperwork to forget.

Form W-9, Request for Taxpayer Identification Number and Certification, is not filed with the IRS. The payer keeps it and uses it to prepare information returns, most commonly Form 1099-NEC for services. You certify three things: the TIN is correct, you are not subject to backup withholding, and you are a U.S. person.

What it does not do matters just as much. A W-9 does not decide whether you are an employee or an independent contractor; that classification depends on the actual working relationship, not which form you signed. It does not create an LLC, elect S-corp status, or change how your income is taxed. And it does not, by itself, cause any tax to be withheld from your payments.

Line 1 is your legal name exactly as it appears on your tax return or, for an entity, on its formation documents. Line 2 is for a business or DBA name if it differs. The federal tax classification checkbox is where most mistakes happen, so slow down there.

A sole proprietor or single-member LLC that has not made a corporate election checks "Individual/sole proprietor or single-member LLC," even if the LLC has its own EIN. An LLC that elected S-corp status checks "Limited liability company" and writes "S" in the classification blank. The TIN follows the same logic: sole proprietors may use an SSN; entities taxed as corporations or partnerships use the entity EIN.

• Sole proprietor, no LLC: your legal name on Line 1, SSN or EIN as the TIN.
• Single-member LLC, no election: your name on Line 1, LLC name on Line 2. Per the IRS instructions the TIN should be the owner’s SSN or the owner’s EIN, not the disregarded LLC’s EIN.
• LLC taxed as an S-corp: LLC name on Line 1, "LLC" box checked with "S" entered, entity EIN as the TIN.
• Multi-member LLC: LLC name on Line 1, "P" for partnership unless a corporate election was made, entity EIN.

If the name and TIN combination on your W-9 does not match IRS records, the payer eventually receives a B notice and can be required to withhold a flat 24% from your future payments as backup withholding. The same applies if you simply refuse to provide a TIN.

Backup withholding is not extra tax; it is credited on your return like any withholding. But it is a 24% haircut to cash flow you were counting on, and getting it turned off means fixing the mismatch and getting the payer to update its records, which rarely happens quickly.

The usual causes are mundane: a maiden name that does not match SSA records, a business nickname instead of the legal entity name, or a disregarded LLC’s EIN used where the owner’s number belongs. Match the form to your tax return and the problem never starts.

It helps to see the whole sequence, because at every step there is a cheap fix and an expensive drift. After the payer files its 1099s, the IRS runs the names and TINs against its records. Mismatches come back to the payer on a CP2100 or CP2100A notice, which obligates the payer to send you a first B notice with a blank W-9 and a deadline, generally around 15 business days, to return a corrected form. Respond in time and nothing happens; the record is fixed and no withholding ever starts.

Ignore the first B notice and backup withholding begins on future payments. If the same payee mismatches again in a later year, the second B notice is stricter: a new W-9 is no longer enough, and you generally have to obtain validation directly, an SSA printout for an SSN or an IRS letter 147-C for an EIN, before the payer may stop withholding. That is a slow, bureaucratic errand that exists only because a form was filled out casually two years earlier.

Once backup withholding has been taken, it is not refundable from the payer; it is remitted to the IRS and shows up on your 1099 as federal tax withheld, creditable when you file. So the money is not lost, but it is locked up until filing season. The practical rule: treat any B notice as a same-week task, and confirm in writing that the payer updated its records.

Submitting the W-9 starts the clock on a year of untaxed income. Nothing is being withheld from those payments, so federal and state income tax plus self-employment tax are entirely your job, generally through quarterly estimated payments.

Keep a copy of every W-9 you submit and a running list of who has one. In January, reconcile the 1099-NEC forms that arrive against your own records of what each payer actually paid. Report your real income either way; a missing or wrong 1099 does not change what you owe, but it does predict IRS matching notices worth heading off.

• Open a separate business bank account and deposit contractor income there.
• Set aside a percentage of every payment for taxes the day it arrives.
• Calendar the quarterly estimated payment dates for the year.
• Track expenses from day one rather than reconstructing them in April.

A locum physician might submit W-9s to four agencies and work in three states in the same year. The W-9 handles federal information reporting, but it says nothing about state filing obligations. Income earned in a state generally creates a nonresident filing requirement there, whether or not anyone reminds you.

This is also where the entity question earns its keep. Whether locum income should run through an S-corp depends on income level, state mix, and payroll costs, and the answer needs to be settled before the W-9s go out, because agencies pay whoever the W-9 names. Changing mid-year splits your income across two tax identities and complicates everything downstream.