Form W-8BEN
Form W-8BEN (Certificate of Foreign Status of Beneficial Owner) is the IRS form a non-US individual provides to a US company that pays them. For contractor payouts it does two jobs: certifies the person is not a US taxpayer — documenting why the payer files no 1099 for them — and establishes what US withholding, if any, applies. Entities use the W-8BEN-E variant.
How it works in a contractor payout flow
- Before the first payment, the US payer collects a completed W-8BEN from the foreign contractor (platforms do this at onboarding).
- For services performed outside the US by a non-US person, the income is generally foreign-source: no US withholding, no 1099 — the W-8BEN on file is the evidence.
- The form is kept, not sent to the IRS, and remains valid through the third calendar year after signing, or until circumstances change.
Common points of confusion
- W-8BEN vs W-9: W-9 is for US persons (leading to 1099-NEC reporting); W-8BEN is for foreign persons. Every contractor gives you one or the other.
- It certifies tax status, not work status — it has nothing to do with classification.
- A foreign contractor physically working in the US is a different, more complicated case; that’s where treaty claims and withholding enter.
Collecting W-8BENs at onboarding is table stakes for contractor management and payout platforms — it’s worth checking the platform stores and re-collects them on expiry, not just at signup.