Line 3b: foreign partners, owners and beneficiaries
Line 3b is the only substantive change the March 2024 revision made to the form, and it is the line most often checked in error. It applies to a narrow set of filers in a narrow set of circumstances.
If you are an individual, a corporation, or a business giving a W-9 to a customer, leave Line 3b blank. It concerns flow-through entities passing forms up a chain of ownership rather than ordinary commercial relationships.
It is also the line most guides leave out. We checked 40 W-9 guides taken from live search results, and 82% of the walkthroughs among them never named Line 3b at all, which is a reasonable sign that they were written against the October 2018 form and left alone since. See the study and the raw data.
The exact wording on the form
Line 3b of Form W-9 (Rev. March 2024) reads:
If on line 3a you checked “Partnership” or “Trust/estate,” or checked “LLC” and entered “P” as its tax classification, and you are providing this form to a partnership, trust, or estate in which you have an ownership interest, check this box if you have any foreign partners, owners, or beneficiaries.
The three-part test
All three conditions must hold. Fail any one and the box stays empty.
You are a flow-through entity
On Line 3a you checked Partnership, or Trust/estate, or LLC with
Pin the letter space. If you checked any other box, Line 3b cannot apply to you.The recipient is a flow-through entity you own part of
You are giving the form to a partnership, trust or estate in which you hold an ownership interest. A customer, a bank, a client, a marketplace: none of these qualify. This is about an investment or ownership relationship, not a commercial one.
You have foreign partners, owners or beneficiaries
Direct or indirect. A foreign partner one tier down counts. A foreign partner three tiers down counts. Foreign here means a person or entity that is not a U.S. person.
Beyond the three-part test the instructions draw a bright line: you must check the box on Line 3b if you receive a Form W-8, or documentary evidence, from any partner, owner or beneficiary establishing foreign status, or if you receive a Form W-9 from any partner, owner or beneficiary that has itself checked Line 3b. That second limb carries the disclosure up a chain of tiered entities.
The instructions are blunt about the cost of leaving it out: without the information you may be unable to file a correct information return or furnish a correct payee statement, and they point to sections 6698, 6722 and 6724 for the penalties that can follow. A partnership that checks Line 3b may also need to complete Schedules K-2 and K-3 with Form 1065.
Worked examples
| Situation | Line 3b |
|---|---|
| A partnership of two U.S. citizens gives a W-9 to a corporate client that hired it | Blank. The recipient is a customer |
| The same partnership gives a W-9 to a real estate partnership it invested in | Blank. No foreign partners |
| A partnership with one Swedish partner gives a W-9 to a partnership it holds an interest in | Checked |
| Partnership A owns an interest in Partnership B. A has a partner that is Partnership C, which has an Australian partner. A gives a W-9 to B | Checked. An indirect foreign partner counts |
| A trust with a beneficiary resident in Mexico gives a W-9 to a partnership in which it holds an interest | Checked |
| A multi-member LLC taxed as a partnership, all U.S. members, gives a W-9 to its bank | Blank |
| An individual freelancer gives a W-9 to a client | Blank. Line 3b never applies to individuals |
| An S corporation with U.S. shareholders gives a W-9 to a partnership it invested in | Blank. Not a Line 3b entity type |
Why the IRS added it
Flow-through entities can be stacked several tiers deep, and withholding obligations on foreign persons sit with the entity that makes the payment. Before March 2024, an upper-tier partnership receiving a W-9 from a lower-tier partnership learned nothing about who sat beneath it. If a foreign person was two tiers down, the entity carrying the withholding obligation could be unaware of it. Line 3b closes that gap. A single check tells the recipient that foreign persons exist somewhere in the chain, so it can ask the follow-up questions its own reporting requires: Forms 8804, 8805 and 1042-S, and withholding under IRC sections 1441 to 1446.
The recipient will come back asking for details: which partners, which countries, what percentages. That follow-up is the purpose of the line. If your partnership has foreign partners you need a tax advisor with cross-border experience, because the withholding rules are unforgiving and the penalties are substantial.
What it does not mean
- It does not make you a foreign entity. You are still a U.S. person certifying that status in Part II.
- Backup withholding is a separate mechanism with its own trigger. Detail
- FATCA codes are a different entry altogether, over on Line 4.
- A foreign customer is beside the point. The question asks about your own partners and owners.
- It has nothing to do with foreign bank accounts or FBAR reporting.
If you hold the old form
Revisions before March 2024 have no Line 3b, and no way to capture this. If you are collecting W-9s, insist on the Rev. March 2024 revision. An old form from a partnership with foreign partners leaves you without information you may be required to have. Download the current revision
Frequently asked questions
Do most people need to fill in Line 3b?
No. The great majority of W-9s leave it blank. It applies only when a flow-through entity gives the form to another flow-through entity in which it holds an ownership interest, and foreign partners, owners or beneficiaries exist.
What counts as an indirect foreign partner?
A foreign person who holds an interest through one or more intermediate entities. If your partner is itself a partnership with a foreign partner, you have an indirect foreign partner.
What happens if I leave Line 3b blank when it applies?
The upper-tier entity lacks information it needs for its own reporting and withholding, and may have to treat your interest conservatively. Since the certification in Part II covers the accuracy of the form, an omission on a line that applies to you is not a safe simplification.
Does an S corporation ever check Line 3b?
Line 3b applies to partnerships, trusts, estates and LLCs taxed as partnerships, so an S corporation never checks it. Separately, an S corporation cannot have a nonresident alien shareholder under IRC 1361(b)(1)(C), though a resident alien can hold S corporation stock, because a resident alien is a U.S. person for tax purposes.
Can I still use the October 2018 form?
It has no Line 3b, so it cannot capture this information, and requesters may reject it. Use the Rev. March 2024 revision. Download it
General information, not tax advice. This page explains a federal tax form in plain English. It is not legal, tax, or accounting advice, and W9Form.org is not affiliated with the IRS. Verify everything against the official Form W-9 page on IRS.gov and speak to a licensed professional about your own situation. How we source and review these pages.