U.S. residents are required to file information returns with the IRS when certain financial activities occur. An example of these activities include: income paid, real estate transactions, mortgage interest paid, acquisition or abandonment of secured property, cancellation of debt, and contributions made to an IRA…to name a few. When filing a return, a taxpayer identification number (TIN) is required.
The completion of a W-9 form is only necessary if you are a U.S. resident (including a resident alien) and have not already obtained a TIN. In addition to filing tax returns, where applicable, the TIN form is also used to:
- Certify the TIN you are giving is correct (or waiting for a number to be issued).
- Certify you are not subject to backup withholding.
- Claim exemption from backup withholding, if you are a U.S.-exempt payee.
Completing a W-9 form is straightforward. Just provide your name, address, and Social Security Number; or the name, address, and employer identification number of your business. By submitting a W-9 form to your employer, you are certifying that the tax ID number provided is correct and that you are not subject to backup withholding.