1099 or W-8BEN? Getting International Contractor Tax Forms Right

A 1099 reports payments to a US person, generally a US citizen, resident, or US-based entity, for US tax reporting purposes. A contractor who is a non-US person performing work entirely outside the US typically isn't the right recipient for a 1099 at all. Sending one anyway doesn't just create unnecessary paperwork; it can create confusion for the contractor's own tax filing and for your own records about who you're actually required to report on.

A W-8BEN (or W-8BEN-E for entities) is the form a non-US person or company provides to certify their foreign status, which is what lets a US payer correctly treat them as outside 1099 reporting and, where applicable, apply the right withholding treatment under any relevant tax treaty. Collecting a W-8BEN from a genuinely foreign contractor, rather than a 1099, is usually the correct paperwork, assuming the work doesn't have a US-source income complication.

The default gets more complicated if the foreign contractor's work has a US connection beyond just being paid by a US company, for instance if part of the work is physically performed in the US, or if the engagement is structured in a way that creates US-source income under the relevant rules. These situations are less common for a fully remote, fully offshore contractor, but worth flagging to your accountant rather than assuming every foreign contractor relationship is automatically outside US reporting.

Before a new contractor's first payment, collect the right form based on their status: a W-9 for a US person, a W-8BEN or W-8BEN-E for a genuinely foreign person or entity, confirmed by where they're a tax resident and where the work is performed, not just their nationality or where they happen to be traveling. Bake this into your contractor onboarding checklist so it happens automatically rather than being decided ad hoc by whoever processes the first invoice.

A workable intake sequence looks like this:

1. Before the first payment, confirm where the contractor is a tax resident and where the work is performed, not just their nationality.
2. Collect a W-9 from a US person, meaning a US citizen, resident, or US-based entity that 1099 reporting applies to.
3. Collect a W-8BEN from a genuinely foreign individual, or a W-8BEN-E from a foreign entity.
4. Flag any engagement with US-based work or possible US-source income for review with your accountant.
5. Add these steps to your contractor onboarding checklist so the right form is on file before any invoice is paid.

If you discover you've been issuing 1099s to genuinely foreign contractors, it's worth a conversation with your accountant about correcting the record going forward and, if relevant, for prior years. This isn't usually a crisis, since a 1099 issued to the wrong recipient type is a correctable paperwork error rather than a fraud issue, but fixing it going forward stops the pattern from compounding and keeps your books internally consistent.

It's tempting to treat this as a minor paperwork detail, but the form you issue is also a signal of how carefully you're tracking who you're paying and where, which matters for more than just this one filing. A company that's sloppy about contractor tax forms is often also sloppy about the underlying classification question (contractor versus employee) covered elsewhere, since both stem from the same root habit of not tracking where each person actually is and what status they actually hold. Getting the form right is a small, visible proxy for a bigger discipline worth having anyway.

A US citizen or green card holder working from anywhere: W-9, and 1099-reportable once payments reach the current reporting threshold. A non-US person working entirely outside the US with no US-source income complication: W-8BEN (or W-8BEN-E for an entity), and typically not 1099-reportable, but confirm with your CPA. A non-US entity, rather than an individual, invoicing you for contractor work: W-8BEN-E, the entity version of the same form. Anything that doesn't fit cleanly into one of these three, dual citizenship, split work locations, an entity structure you're unfamiliar with, is worth a direct question to your accountant rather than a guess.