Employers have contractors fill out Form W-9 to collect their Social Security Number (SSN), Individual Taxpayer Identification Number (ITIN), or Federal Employer Identification Number (FEIN). This ensures that the contractor can legally reside and work in the United States. Contractors who fill out this form can also claim exempt from backup withholding. Once a contractor completes Form W-9, you do not need to send it in to the IRS. Be sure to file it away in a safe place for your records.
If a contractor does not fill out Form W-9, they may face penalties and be subject to a back withholding. This requires an income tax withholding of 28% from payments.
Gusto does not generate Form W-9 since you would have already collected the contractor's taxpayer identification number before entering the worker into your account. Download Form W-9 on the IRS website if you need a copy. We also do not support backup withholding, which could result from a contractor not completing the W-9.