The whole decision is one question, asked twice
You are about to pay a contractor and your onboarding flow asks for a tax form. Three forms come up, Form W-9, Form W-8BEN, and Form W-8BEN-E, and picking the wrong one means you collected paper that does not document the payment you are about to make.
The good news is that the choice is not complicated. It comes down to one question asked twice.
- Is the contractor a US person or a foreign person?
- If foreign, are they an individual or an entity?
Answer those two and you land on exactly one form. The rest of this guide walks the rule behind each answer, with the IRS source for every claim, and gives you a decision table you can keep next to your onboarding flow.
A quick note before the rules. This is general information, not tax or legal advice. Withholding and reporting outcomes turn on the facts of your situation, so confirm the specifics with a qualified tax professional before you pay.
Question one: US person or foreign person?
This is the question that does most of the work, and the word that matters is “person” in the tax sense, not “where they live.”
A US person gives you Form W-9. According to the IRS, you use Form W-9 “to provide your correct Taxpayer Identification Number (TIN) to the person who is required to file an information return with the IRS,” per the IRS About Form W-9 page. On the question of who counts as a US person, Form W-9 itself defines an individual US person as one “who is a U.S. citizen or U.S. resident alien.” A green-card holder is a resident alien under the green card test, so the practical individual cases are a US citizen, a green-card holder, or a resident alien for tax purposes.
A foreign individual gives you Form W-8BEN. According to the IRS, you “Give Form W-8 BEN to the withholding agent or payer if you are a foreign person and you are the beneficial owner of an amount subject to withholding,” per the IRS About Form W-8BEN page. The form’s official title is the Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals).
The trap here is location. A US citizen working from Lisbon is still a US person and still gives you a W-9. A foreign national who has never set foot in the US still gives you a W-8 form. Tax status decides the form, not the country the work happens in.
The substantial presence test can flip the answer
There is one case where a person who feels foreign is actually a US person for tax purposes. A foreign individual can become a US resident alien by meeting the substantial presence test, a day-count test the IRS applies based on time physically present in the US.
According to the IRS Substantial Presence Test page, you meet the test if you are physically present in the US on at least “31 days during the current year, and 183 days during the 3-year period” that includes the current year and the two years before it. The 183-day count is weighted, not a simple sum. The IRS counts all the days present in the current year, “1/3 of the days you were present in the first year before the current year,” and “1/6 of the days you were present in the second year before the current year.”
If a contractor meets that test, the IRS states: “You will be considered a United States resident for tax purposes if you meet the substantial presence test for the calendar year.” A US resident alien is a US person, so the form flips from W-8BEN to W-9. This is why the question to ask up front is about US tax residency, not just citizenship. A foreign national who spends a lot of time in the US can cross into US-person status without changing their passport.
Question two: individual or entity?
Once you know the contractor is foreign, the second question is simple. Are you paying a person or a company?
A foreign individual completes Form W-8BEN. A foreign entity completes Form W-8BEN-E. According to the IRS About Form W-8BEN-E page, “Form W-8 BEN-E is used by foreign entities to document their status for purposes of chapter 3 and chapter 4, as well as other code provisions.” Its official title is the Certificate of Status of Beneficial Owner for United States Tax Withholding and Reporting (Entities).
Most solo freelancers are individuals and give you W-8BEN. A contractor who invoices through their own incorporated company, a foreign corporation, partnership, or foreign LLC, is an entity and gives you W-8BEN-E. When you are not sure, ask how they bill you and whether they are incorporated. That one question settles it.
The decision table
Keep this next to your contractor onboarding flow.
| Contractor’s tax status | Type | Form to collect | IRS source |
|---|---|---|---|
| US citizen | Individual | Form W-9 | About Form W-9 |
| US green-card holder | Individual | Form W-9 | About Form W-9 |
| Resident alien (meets substantial presence test) | Individual | Form W-9 | Substantial Presence Test |
| US company, LLC, or partnership | Entity | Form W-9 | About Form W-9 |
| Foreign individual (not a US person) | Individual | Form W-8BEN | About Form W-8BEN |
| Foreign company, corporation, or partnership | Entity | Form W-8BEN-E | About Form W-8BEN-E |
The first four rows are all US persons, so the answer is always W-9, whether the payee is a person or a company. The form only splits into the W-8 family once the contractor is foreign.
Worked examples
A few real shapes that come up in a global contractor program.
A designer in Manila, Philippine citizen, never been to the US. Foreign individual. Collect a W-8BEN.
An engineer who is a US citizen but lives full time in Berlin. US person. Collect a W-9. The location does not matter.
A development studio in Poland that invoices through its registered company. Foreign entity. Collect a W-8BEN-E.
A contractor in Canada who spent more than half of last year working from your US office. Run the substantial presence test before you decide. If they meet it, they are a US resident alien for tax purposes and you collect a W-9. If they do not, they are a foreign individual and you collect a W-8BEN. This is the one case worth checking carefully, and worth a tax professional’s read.
A US LLC owned by a foreign founder. The payee is a US entity, so collect a W-9 from the LLC. The owner’s citizenship does not change the entity’s status.
Why getting this right matters
The form is your proof. Without the correct form on file, you cannot show the IRS that you classified the payment correctly. A US person without a W-9 on file can be pushed into backup withholding. A foreign contractor without a valid W-8BEN can be pushed into default nonresident withholding treatment. The form is what keeps a clean payment clean.
None of these forms goes to the IRS. Form W-9 instructs the payee to “Give form to the requester. Do not send to the IRS,” and the IRS About Form W-8BEN page directs the contractor to “Give Form W-8 BEN to the withholding agent or payer.” The contractor gives the form to you, the payer, and you hold it on file before the first payment. Build the request into onboarding next to the contract and the bank details so the form is on hand at the time of payment, not chased afterward.
If the contractor you settled on is foreign, the next step is collecting the W-8BEN cleanly. Our W-8BEN collection checklist walks the full process with the IRS citations attached, and our companion guide on how to collect a W-8BEN from a foreign contractor covers the six-step packet end to end.
How this fits the bigger payment workflow
Picking the form is one step in paying a contractor cleanly. The full picture is covered in our pillar guides: how to pay international contractors from a US company walks the classification, tax, and payment decisions end to end, and the pay contractors hub lays out the country-by-country detail. The form decision in this post is the same first step every one of those guides opens with.
When a platform makes the call for you
A US founder paying one contractor can run these two questions by hand. A US team paying a dozen contractors across several countries is tracking multiple statuses, multiple forms, and multiple expiry dates, and that is where the manual approach starts to slip.
Omnivoo Contract Management handles it for a flat $49 per finalized contract. We ask the right questions during onboarding, collect the correct form, W-9 for a US person, W-8BEN for a foreign individual, and W-8BEN-E for a foreign entity, run the KYC, draft and manage the contract, and pay your contractors in 150+ countries through local bank transfer, end to end. Transaction fees are passed through at cost, with no FX markup and no subscription.
A simple sanity check
Two questions for every contractor relationship.
- Is the contractor a US person, meaning a US citizen, a green-card holder, or a resident alien under the substantial presence test? If yes, collect a W-9.
- If foreign, are they an individual or an entity? Individual collects a W-8BEN, entity collects a W-8BEN-E.
If you can answer both with confidence and the right form is on file before payment, your contractor onboarding is in good shape. Want to skip the assembly? See how Omnivoo Contract Management handles contractor tax forms end to end, or talk to our team about your setup.