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Find out what the updates are to the new W-9 form and how it impacts your tax reporting process.
Tax compliance may not always be the most exciting task, but staying ahead of updates can make all the difference in your reporting accuracy.
The IRS has just released a draft version of Form W-9 for 2026, and this is no ordinary revision. If you’re a sole proprietor, a disregarded entity, or a digital asset broker, these changes could directly impact how you report your taxpayer identification number (TIN) and certifications.
Let’s break down these changes and explain how they might impact your filing process, so you’re prepared well in advance.
What’s new in W-9 for 2026?
The IRS draft Form W-9 introduces two major changes that businesses and individuals should be aware of. Let’s dive into the details.
1. TIN Guidelines for Sole Proprietors and Disregarded Entities
If you operate as a sole proprietor — meaning you own the business personally with no legal separation between you and the business — you are required to provide your Social Security Number (SSN) on the Form W-9.
For example, if you run a freelance graphic design business under your own name, such as “Sarah Johnson Designs,” you should enter your SSN on the form.
If you operate as a single-member LLC, treated as a disregarded entity for federal tax purposes, you must use the owner’s TIN instead of the LLC’s EIN.
For example, if you operate a photography business called “Bright Lens Studio” as a single-member LLC, you should use your personal SSN or EIN — not the LLC’s EIN.
2. New Checkbox for U.S. Digital Asset Broker
Part II of the Form W-9 now includes a checkbox specifically for U.S. digital asset brokers.
If you’re a U.S. digital asset broker, you will need to use this checkbox to certify that you are dealing with another broker that also qualifies as a U.S. digital asset broker.
Requirements for the other broker:
- The other broker must meet the IRS definition of a digital asset broker, as defined in Regulations section 1.6045‑1(g)(4)(i)(A)(1).
- The broker must not be a registered investment adviser.
- They must qualify as an “exempt recipient” under IRS rules, as per Regulations section 1.6045‑1(c)(3)(i)(B)(12), mentioned in IRS Notice 2024‑56.
With the rise of digital assets like cryptocurrency, the IRS has introduced Form 1099-DA, a new form specifically for reporting digital asset transactions, including sales, exchanges, and other dispositions. This W-9 update aligns with the reporting requirements for Form 1099-DA.
How to prepare for the final version of W-9
The 2026 Form W-9 is still a draft, so the IRS may make additional changes before the final version is released. Here’s what you can do now to stay ahead:
- If you’re a payer, educate your recipients about the new rules for TIN reporting and the digital asset broker exemption.
- If you’re a recipient, take the time to understand how to complete the new W-9 correctly. This includes knowing which TIN to report, especially if you’re a sole proprietor or operate as a disregarded entity. Digital asset brokers should be familiar with the new checkbox that certifies their status.
As the IRS finalizes the 2026 Form W-9, continue to stay updated on any further changes. Monitoring these updates will help you remain compliant, ensuring that you’re always using the correct version of the form and following the latest requirements.
We’ll continue to monitor updates and keep you informed as soon as any new changes are confirmed.
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