Although Form W-9 is issued by the U.S. Internal Revenue Service (IRS), there are certain situations where Canadian residents are also required to complete and submit this form.
Examples include working remotely for a U.S. company from within Canada, investing in U.S. real estate, or holding shares and capital in U.S. companies. Contact us to immigrate to Canada.
What is a W-9 Form?
Form W-9 is designed to request the Taxpayer Identification Number (TIN) of an individual or entity. This number can either be a Social Security Number (SSN) or an Employer Identification Number (EIN).
This information is crucial for accurately reporting income to the IRS and allows the U.S. government to monitor taxable transactions.
Difference Between Form W-9 and Form W-8BEN
Both forms are used to establish tax status, but they apply to different groups of taxpayers:
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Form W-9: For U.S. taxpayers, citizens, dual citizens, or businesses with U.S. tax obligations.
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Form W-8BEN: For foreign individuals who are not U.S. citizens but earn U.S.-sourced income, such as Canadian citizens residing only in Canada.
| W-9 Form | W-8BEN Form |
|---|---|
| For U.S. taxpayers/citizens | For non-U.S. taxpayers |
| Provides taxpayer identification | Certifies foreign status |
| Used to report income to the IRS | Used to claim tax treaty benefits |
Who Needs to Complete a W-9 in Canada?
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Individuals earning income from U.S. companies (e.g., remote workers).
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Canadians with rental income from U.S. properties.
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Investors in U.S. stocks and bonds.
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Canadian business owners with U.S. tax reporting obligations, such as receiving payments from U.S. customers.
How to Complete a W-9 Form
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Personal information: Name, address, and U.S. Taxpayer Identification Number (TIN).
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TIN: If you only have a Canadian Social Insurance Number (SIN), consult a tax professional, as SINs are generally not used in place of TINs.
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Tax classification: Identify your federal tax classification (e.g., “Individual/sole proprietor”).
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Requester information: If required, include the name and address of the entity requesting the form.
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Signature and certification: Sign the certification section to confirm the accuracy of the information.
Penalties for Incorrect Information
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The IRS may withhold 24% of your income if the TIN is incorrect (backup withholding).
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A penalty of US$50 per incorrect TIN may also apply (up to an annual cap).
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Penalties may be waived if you show reasonable effort to provide the correct TIN.
Where to Submit the W-9 Form
The form should be sent directly to the entity paying you (employer, client, or financial institution).
This is necessary so that they can report your income to the IRS.
W-9 and FATCA
The Foreign Account Tax Compliance Act (FATCA) requires Canadian financial institutions to report accounts held by U.S. persons or foreign entities linked to the U.S.
Banks in Canada use Form W-9 to collect this information and forward it to the IRS.
Canada-U.S. Enhanced Tax Information Exchange Agreement
Under this bilateral agreement, Canadian financial institutions must identify and report U.S. persons’ accounts to the CRA, which then shares the data with the IRS.
This is why mutual funds, insurance providers, or investment companies in Canada may ask you for a W-9.
Do All Canadians Need to File a W-9?
No. For most Canadians, Form W-8BEN is sufficient.
However, Canadians who also hold U.S. citizenship (by birth or naturalisation) are considered U.S. taxpayers under FATCA and must provide Form W-9 if requested.
Updates to the W-9 Form (2024)
The IRS revised Form W-9 in 2024:
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Line 3 was divided into Line 3A and Line 3 B.
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Partnerships and trusts must now disclose any foreign partners, owners, or beneficiaries.
Protecting Your Personal Information
Since the W-9 form requires sensitive data, consider the following precautions:
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Secure transmission: Ensure the method of submission is safe (look for “https://” in URLs).
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Limit sharing: Only provide your W-9 to legitimate parties such as employers or banks.
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Verify authenticity: Confirm the identity of the requesting party to avoid fraud or scams.
In short, not every Canadian needs to complete a W-9. This form is primarily required for U.S. taxpayers, dual citizens, or Canadian businesses with direct U.S. tax obligations. For most others, the W-8BEN form is the appropriate choice.