Form W-9 Policy Review

By: Chuck Telk, CPA, Partner | email

Now would be an excellent time to review your policy regarding W-9 forms. To be fully compliant with IRS regulations, a W-9 form should be on file for any non-employee who receives a check from the cooperative. This form should be legible such that the name, address, EIN, and SSN can be easily read. It should also be signed. While there are many excuses as to why a potential payee will try to avoid providing this form, the fact is that it is required. Remedial action by the cooperative should be to withhold federal income tax, through back-up withholding, from a check to any non-employee who refuses to provide an appropriate W-9 form.

Please don’t confuse the requirement to have a signed W-9 on hand with the need to issue a 1099 to everyone that receives a check. This is not the case. The W-9 form is used to help determine whether or not a 1099 should be sent to the various payees. Payees should understand that providing a W-9 form doesn’t guarantee that they will receive a 1099. But, should a 1099 be required, important information is obtained from the W-9 form. It is far easier to have the W-9 on file than it is to try to track down a signed W-9 in January when preparing 1099’s for the prior year.

Should you have any questions regarding these or any other tax related topics, please do not hesitate to contact me at our Des Moines office at (515) 270-1446, or email me at [email protected].