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The IRS Form W-9 Revision Is Here

The IRS’s revision of Form W-9, Request for Taxpayer Identification Number and Certification, is finally official. The date on the new form is March 2024.

The revision, as in the draft version, is to Line 3 of the W-9, where the payee identifies its tax classification. Line 3 now has two parts: 3A and 3B.

Classifications still include individual/sole proprietor, partnership, S-corporation, C-corporation or trust/estate. That’s now indicated in Line 3A. The new Line 3B is designed to capture flow-through entities (e.g., partnerships, trusts or estates) with foreign partners, owners or beneficiaries (direct or indirect).

Foreign Flow-through Ownership

The new checkbox is for entities that select “partnership” or “trust/estate” on line 3A. The new form requires these entities to check line 3B if they have foreign partners, owners or beneficiaries. “Partnership” includes a limited liability company classified as a partnership.

The change requires organizations to provide information on foreign partners, owners or beneficiaries for purposes of complying with relevant reporting requirements. Partnerships with indirect foreign partners might have to complete Form 1065, Schedules K-2 and K-3. Schedules K-2 and K-3 are relatively new reporting forms that pass-through entities must complete; reporting began in the 2021 tax year.

Specific information on what is new, from the form itself, is as follows:

What’s New
Line 3a has been modified to clarify how a disregarded entity completes this line. An LLC that is a disregarded entity should check the appropriate box for the tax classification of its owner. Otherwise, it should check the “LLC” box and enter its appropriate tax classification.

New line 3b has been added to this form. A flow-through entity is required to complete this line to indicate that it has direct or indirect foreign partners, owners, or beneficiaries when it provides the Form W-9 to another flow-through entity in which it has an ownership interest. This change is intended to provide a flow-through entity with information regarding the status of its indirect foreign partners, owners, or beneficiaries, so that it can satisfy any applicable reporting requirements. For example, a partnership that has any indirect foreign partners may be required to complete Schedules K-2 and K-3. See the Partnership Instructions for Schedules K-2 and K-3 (Form 1065).

Now that the new form W-9 is official, organizations are required to accept it. For a look at the form, click here.

For information on how VendorInfo can automatically verify your vendor tax identification number, contact us.

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