What is the Difference Between W9 and W4?

Dec 05th, 2023

There are over 800 different Internal Revenue Service (IRS) tax documents in the United States. At the end of the tax year, you must understand which of the forms apply to you and how to fill them out in a correct manner. If you want a free online w9 form generator, eFormscreator can quickly generate it for you.

The two most common tax document forms are Form W-9 and W-4. Due to its similarities, these are the forms that people get confused about the most.

In this blog, we shall outline the difference between w4 and w9 and know more about them.

Recap of the Internal Revenue Service (IRS)

The Internal Revenue Service (IRS) is a U.S. government agency responsible for the collection of federal taxes and the enforcement of tax laws.

It was established in 1862 by President Abraham Lincoln and operated under the authority of the U.S. Department of Treasury. The main motive of the IRS is to collect individual income and employment taxes as well as corporate, excise and estate taxes.

What is a W9 Form?

A W9 form is commonly known as the Request for Taxpayer Identification Number (TIN) and Certification.

This is a one-page tax form that employers use to get the TIN from self-employed individuals and independent contractors.

What is NDAs and Why is it Important?

Who is Qualified To Be An Independent Contractor?

An Independent Contractor is defined as the following:

  • Workers who have the bulk of control over when and how they complete the tasks.
  • Those who do not receive health insurance, 401(k) matching and other benefits.
  • Individuals who pay all their taxes on their own.

Some of the common examples of independent contractors include graphic designers, writers and repair persons.

One of the highlighting factors of an independent contractors is that they receive non-employee compensation from the companies for whom they work.

Examples of non-employee compensation include fees, commissions, and awards for service finished.

A W-9 form also provides other personal information to employers, like the independent contractor’s full name and address.

Unlike other tax forms, a W-9 form is not filed with the IRS. It is submitted to the independent contractor’s supervisor.

As the end of the tax year arrives, independent contractors must submit a Form W-9 to the companies they worked for so that they can get a 1099-MISC form in return.

Form W-9 and Tax Implications

The Form W-9 acts as an agreement that independent contractors are responsible for withholding taxes from their income. Full-time employee have their federal income taxes, Medicare and Social Security taxes withheld from their paychecks by their employers.

What Do Independent Contractors Include on a Form W-9?

An Independent Contractor includes the following on a form w-9:

  • The name of the payee.
  • The payee’s federal tax collection. This can be a single-member limited liability company (LLC), S corporation or C corporation.
  • The payee’s current, complete mailing address.
  • The payee’s taxpayer identification number (TIN), which includes either an Employer Identification Number (EIN).

What is a W-4 Form?

W-4 Form, also known as the Employee’s Withholding Allowance Certificate, is a federal form that employees must complete when starting a new job.

Employers use a Form W-4 to determine how much income tax to withhold from their employee’s paychecks.

The amount of income tax withheld from the employee will be based on their wages and the number of withholding allowances they qualify for.

Withholding allowances are based on the employee’s filing status, how many dependents they have, and their foreseen tax credits and deductions.

It is of vital importance that employers ensure that the information on each of their employee’s Form W-4 is correct.

If the incorrect amount is withheld from the employee’s paycheck, they can face expensive penalties from the IRS.

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What Do The Employees Include on a W-4 Form?

  • Full name, postal address and zip code.
  • Social Security Number
  • Martial Status
  • How many dependents do they have
  • Any additional money that the employer should withhold.

W9 vs W4

Now you have a good idea about what W-9 and W-4 forms are, let us take a closer look at their differences and what their indications are for the taxpayers.

Difference Between W9 and W4:

Form W-9 Form W-4
Independent contractor fill out a Form W-9 Employees fill out the Form W-4
Self-employed workers use the Form W-9 to provide their taxpayers identification number to companies they have worked for Employee use W-4 form to infrom their employers of how much income tax to withhold from their paycheck
W-9 forms submission deadline is 31st January W-4 forms submission deadline is first month of starting a new job
Businesses send a blank W-9 form before independent contractors start working for them Generally, employers should issue their employers with a W-4 Form on their very first day
Independent Contractors can file a Form W-9 annually Employees need to file a new Form W-4 every time when they start a new job

The main difference between the W9 and W4 Form is that a formal employee fills out a W-4 Form, whereas a self-employed worker fills out a W-9 Form.

It is vital to remember that a W-9 Form is nothing but an Information Return that provides business with an independent contractor’s details and isn’t submitted to the IRS.

In comparison to the W-4 Form, it is to be filled out by the full-time employees.

Employees must fill out a new W-4 form whenever their financial situation changes. In addition to this, when an employee starts a new job, this can include a change in marital status, having a child, or a raise in wages.

All this information is relevant to an employer because it can indicate a change in the employee’s payroll at the end of the year.

Do I Have To Fill Out Both W-9 and W-4 Forms?

Self-employed workers do not always have to fill out a Form W-9. Moreover, many businesses ask independent contractors to finish the one to avoid any costly penalty from the IRS.

If an independent contractor refuses to complete a Form W-9, the firm can withhold a certain percentage from their wages.

This process is known as backup withholding and can mean that the employer withholds 28% of your pay and submits it to the IRS.


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