Glossary of W-9 and 1099 terms

Definitions for the vocabulary this form drags in with it. Alphabetical, with a link onward wherever there is more to say.

By The W9Form.org Editorial Team Updated August 18, 2026 Reviewed against Form W-9 (Rev. March 2024)

A to Z

B notice: The notice a payer must send a payee after the IRS reports a name and TIN mismatch on a filed information return. A first B notice asks for a corrected W-9. A second within three years raises the bar, and you have to bring validation from the IRS or SSA.
Backup withholding: A 24% deduction a payer must take from certain reportable payments when a payee has not furnished a valid, certified TIN, or when the IRS has directed it. IRC section 3406 imposes it. The money is not lost: it lands on your 1099 as tax already withheld and credits against what you owe. Detail
Corporate payee exception: The rule that keeps most payments to corporations outside Form 1099-NEC and 1099-MISC reporting. Its coverage stops well short of everything: legal services, medical payments and several other categories stay reportable. Detail
CP2100 notice: The IRS sends this to a payer, listing every payee whose name and TIN combination failed to match IRS records on a filed information return. It starts the B notice cycle.
DBA: Doing business as. A registered trade name a business operates under, distinct from its legal name. On Form W-9 a DBA belongs on Line 2.
Disregarded entity: An entity ignored as separate from its owner for federal income tax purposes, most commonly a single-member LLC with no tax elections. It reports its owner on Form W-9. Detail
EIN: Employer identification number. A nine-digit TIN the IRS issues to identify a business entity, formatted 00-0000000. Detail
Estimated tax: Quarterly payments of income tax and self-employment tax, made by taxpayers whose income never passes through a withholding system. Most independent contractors owe them.
Exempt payee code: A number from 1 to 13 entered on Line 4 of Form W-9 to claim exemption from backup withholding. Only certain entities qualify; an individual never does. All codes
FATCA: The Foreign Account Tax Compliance Act. It requires foreign financial institutions to report accounts held by U.S. persons, and certain U.S. persons to report foreign financial assets.
FATCA exemption code: A letter from A to M entered on Line 4 of Form W-9 to claim exemption from FATCA reporting. It applies only to accounts maintained outside the United States. All codes
FIRPTA: The Foreign Investment in Real Property Tax Act. It requires withholding when U.S. real property is bought from a foreign person. Detail
Flow-through entity: An entity that pays no federal income tax itself and passes its income out to its owners. Partnerships, S corporations, and LLCs taxed as either.
Form 1042-S: The information return that reports U.S.-source income paid to foreign persons. Think of it as the 1099 equivalent for W-8 filers.
Form 1099-K: Filed by payment settlement entities to report payment card and third-party network transactions. Threshold: $20,000 and 200 transactions.
Form 1099-MISC: Reports rents, royalties, prizes, other income, medical payments and gross proceeds paid to attorneys. Detail
Form 1099-NEC: Reports nonemployee compensation, meaning payments for services to someone outside your payroll. Threshold: $2,000 for payments made after December 31, 2025.
Form 945: Annual Return of Withheld Federal Income Tax. A payer reports backup withholding it has deducted and deposited here.
Form W-8BEN: What a foreign individual files in place of a W-9, certifying non-U.S. status and claiming any treaty benefits. Detail
Gross proceeds paid to an attorney: Settlement or similar amounts paid to an attorney, reported in box 10 of Form 1099-MISC. The reporting survives the corporate payee exception, so a law firm organized as a corporation gets one anyway. The amount is also rarely the attorney’s own income; most of it is the client’s. Detail
Information return: A return filed with the IRS about payments made to somebody else, rather than about the filer’s own tax. The whole 1099 series qualifies.
ITIN: Individual taxpayer identification number. Nine digits beginning with 9, issued by the IRS to individuals who need a TIN and cannot get an SSN.
Letter 147C: A letter the IRS issues on request confirming the name associated with an EIN. It is the standard way to settle a name and TIN mismatch. Detail
Nonemployee compensation: Payment for services performed by someone outside your payroll. Reported in box 1a of Form 1099-NEC.
Payee: Whoever receives the payment. The payee is the one who completes Form W-9.
Requester: The payer, in its role as the party asking for a Form W-9. The requester keeps the form and never files it with the IRS.
Resident alien: A non-citizen treated as a U.S. resident for tax purposes, either by holding a green card or by meeting the substantial presence test. Resident aliens complete Form W-9.
Self-employment tax: Social Security and Medicare tax on the net earnings of self-employed people. It covers both the employee and the employer portions, so the rate looks alarming the first time you see it.
SSN: Social Security number. Nine digits issued by the Social Security Administration, formatted 000-00-0000.
Substantial presence test: The day-count test that decides whether a non-citizen counts as a resident alien for tax purposes. Detail
Substitute Form W-9: A requester’s own version of Form W-9. Permitted where it is substantially similar to the official form and carries the required certifications. Detail
TIN: Taxpayer identification number. The umbrella term covering an SSN, EIN, ITIN or ATIN. Detail
TIN matching: The free IRS e-Services tool that tells a payer whether a name and TIN pair agrees with IRS records, before the information return goes out. Detail
U.S. person: A U.S. citizen or resident alien, a partnership, corporation, company or association created or organized in the United States, a domestic estate, or a domestic trust. Only U.S. persons complete Form W-9.
UBIT: Unrelated business income tax. What an otherwise exempt organization owes on income from a trade or business unrelated to its exempt purpose. Detail

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