U.S. · Payroll and employer forms
W-9 exempt payee codes.
Line 4 of Form W-9, code by code: who is exempt and from what.
Most people leave line 4 blank. Exempt payee codes 1 to 13 identify payees that are exempt from backup withholding, such as corporations (code 5), the United States (2) or a bank (11). Individuals and sole proprietors are generally not exempt. FATCA codes A to M matter only for accounts held at certain foreign financial institutions outside the United States.
Look up a line 4 code
Result
Line 4 codes on Form W-9
| Code | Who it identifies (IRS wording) | Payments it exempts from backup withholding |
|---|---|---|
| Code 1 | An organization exempt from tax under section 501(a), any IRA, or a custodial account under section 403(b)(7) if the account satisfies the requirements of section 401(f)(2). | interest and dividends; broker transactions; barter exchange and patronage dividends; payments over $600 and direct sales over $5,000 (generally); payment card and third-party network transactions |
| Code 2 | The United States or any of its agencies or instrumentalities. | interest and dividends; broker transactions; barter exchange and patronage dividends; payments over $600 and direct sales over $5,000 (generally); payment card and third-party network transactions |
| Code 3 | A state, the District of Columbia, a U.S. commonwealth or territory, or any of their political subdivisions or instrumentalities. | interest and dividends; broker transactions; barter exchange and patronage dividends; payments over $600 and direct sales over $5,000 (generally); payment card and third-party network transactions |
| Code 4 | A foreign government or any of its political subdivisions, agencies, or instrumentalities. | interest and dividends; broker transactions; barter exchange and patronage dividends; payments over $600 and direct sales over $5,000 (generally); payment card and third-party network transactions |
| Code 5 | A corporation. | interest and dividends; broker transactions (C corporations only); payments over $600 and direct sales over $5,000 (generally) |
| Code 6 | A dealer in securities or commodities required to register in the United States, the District of Columbia, or a U.S. commonwealth or territory. | interest and dividends; broker transactions |
| Code 7 | A futures commission merchant registered with the Commodity Futures Trading Commission. | broker transactions |
| Code 8 | A real estate investment trust. | interest and dividends; broker transactions |
| Code 9 | An entity registered at all times during the tax year under the Investment Company Act of 1940. | interest and dividends; broker transactions |
| Code 10 | A common trust fund operated by a bank under section 584(a). | interest and dividends; broker transactions |
| Code 11 | A financial institution as defined under section 581. | interest and dividends; broker transactions |
| Code 12 | A middleman known in the investment community as a nominee or custodian. | interest and dividends |
| Code 13 | A trust exempt from tax under section 664 or described in section 4947. | interest and dividends |
| FATCA A | An organization exempt from tax under section 501(a) or any individual retirement plan as defined in section 7701(a)(37). | FATCA reporting only. Applies to accounts maintained outside the United States by certain foreign financial institutions; a U.S.-only account can leave it blank. |
| FATCA B | The United States or any of its agencies or instrumentalities. | FATCA reporting only. Applies to accounts maintained outside the United States by certain foreign financial institutions; a U.S.-only account can leave it blank. |
| FATCA C | A state, the District of Columbia, a U.S. commonwealth or territory, or any of their political subdivisions or instrumentalities. | FATCA reporting only. Applies to accounts maintained outside the United States by certain foreign financial institutions; a U.S.-only account can leave it blank. |
| FATCA D | A corporation the stock of which is regularly traded on one or more established securities markets, as described in Regulations section 1.1472-1(c)(1)(i). | FATCA reporting only. Applies to accounts maintained outside the United States by certain foreign financial institutions; a U.S.-only account can leave it blank. |
| FATCA E | A corporation that is a member of the same expanded affiliated group as a corporation described in Regulations section 1.1472-1(c)(1)(i). | FATCA reporting only. Applies to accounts maintained outside the United States by certain foreign financial institutions; a U.S.-only account can leave it blank. |
| FATCA F | A dealer in securities, commodities, or derivative financial instruments (including notional principal contracts, futures, forwards, and options) that is registered as such under the laws of the United States or any state. | FATCA reporting only. Applies to accounts maintained outside the United States by certain foreign financial institutions; a U.S.-only account can leave it blank. |
| FATCA G | A real estate investment trust. | FATCA reporting only. Applies to accounts maintained outside the United States by certain foreign financial institutions; a U.S.-only account can leave it blank. |
| FATCA H | A regulated investment company as defined in section 851 or an entity registered at all times during the tax year under the Investment Company Act of 1940. | FATCA reporting only. Applies to accounts maintained outside the United States by certain foreign financial institutions; a U.S.-only account can leave it blank. |
| FATCA I | A common trust fund as defined in section 584(a). | FATCA reporting only. Applies to accounts maintained outside the United States by certain foreign financial institutions; a U.S.-only account can leave it blank. |
| FATCA J | A bank as defined in section 581. | FATCA reporting only. Applies to accounts maintained outside the United States by certain foreign financial institutions; a U.S.-only account can leave it blank. |
| FATCA K | A broker. | FATCA reporting only. Applies to accounts maintained outside the United States by certain foreign financial institutions; a U.S.-only account can leave it blank. |
| FATCA L | A trust exempt from tax under section 664 or described in section 4947(a)(1). | FATCA reporting only. Applies to accounts maintained outside the United States by certain foreign financial institutions; a U.S.-only account can leave it blank. |
| FATCA M | A tax-exempt trust under a section 403(b) plan or section 457(g) plan. | FATCA reporting only. Applies to accounts maintained outside the United States by certain foreign financial institutions; a U.S.-only account can leave it blank. |
Who should write a code
The instructions are blunt: individuals, including sole proprietors, are generally not exempt from backup withholding. Corporations are exempt for certain payments, including interest and dividends, but not for payments made in settlement of payment card or third-party network transactions. A corporation is also not exempt for attorneys’ fees or gross proceeds paid to attorneys, and a corporation that provides medical or health care services is not exempt for payments reportable on Form 1099-MISC. S corporations must not enter an exempt payee code in the broker-transactions row, because they are exempt only for sales of noncovered securities acquired before 2012.
How the payment chart works
Being a code 1 to 13 payee does not exempt every payment. The W-9 instructions pair each type of payment with the codes that are exempt from it: interest and dividends (all exempt payees except 7); broker transactions (1 to 4, 6 to 11, and all C corporations); barter exchange and patronage dividends (1 to 4); payments over $600 required to be reported and direct sales over $5,000 (generally 1 to 5); and payment card and third-party network transactions (1 to 4). The last column of the table above applies that chart to each code.
If you are the requester
The Instructions for the Requester of Form W-9 say you may rely on the payee’s claim of exemption unless you have actual knowledge that the exempt payee code or the classification selected is not valid, or the two are inconsistent. If the payee leaves the code blank but the classification box shows an exempt payee, you may accept the classification and treat the payee as exempt unless you have actual knowledge that it is not valid.
Worked example
Lakeside Legal PC is a corporation and writes 5 on line 4. A bank paying it interest can treat it as exempt from backup withholding on that interest, because code 5 is exempt for interest and dividends. But a payer that reports gross proceeds paid to an attorney on Form 1099-MISC still has to consider backup withholding, because the instructions say those payments to a corporation are not exempt. Line 4 never overrides a payment type the chart carves out.
FATCA codes in plain terms
The FATCA code is a separate field. The instructions say it applies to people submitting the form for accounts maintained outside the United States by certain foreign financial institutions, so if you are only giving the form for an account you hold in the United States you may leave it blank. A requester may also indicate that no code is needed by writing “Not Applicable” on that line. See also the line 3a classification box page, since the box you check and the code you write have to be consistent.
Sources
- Form W-9 (Rev. March 2024) with instructions: Line 4 Exemptions: exempt payee codes 1 to 13, the payment chart and footnotes, and FATCA codes A to M. Read November 2, 2026.
- Instructions for the Requester of Form W-9 (03/2024): Relying on a payee’s claim of exemption. Read November 2, 2026.
IRS page last reviewed April 30, 2026. Codes are those printed in the March 2024 revision of Form W-9.
Frequently asked questions
What is an exempt payee code on Form W-9?
It is a number from 1 to 13 written on line 4 that identifies a payee exempt from backup withholding, such as a corporation (code 5), the United States (code 2) or a bank (code 11). Most individuals leave it blank.
Do sole proprietors or individuals use an exempt payee code?
Generally no. The W-9 instructions say individuals, including sole proprietors, are generally not exempt from backup withholding.
Is a corporation exempt from backup withholding on everything?
No. A corporation is exempt for certain payments, including interest and dividends, but not for payment card or third-party network transactions, attorneys’ fees or gross proceeds paid to attorneys, and, for health care providers, payments reportable on Form 1099-MISC.
What is the FATCA exemption code on the W-9?
It is a letter from A to M for payees exempt from FATCA reporting. It applies to accounts maintained outside the United States by certain foreign financial institutions, so a U.S.-only account can leave it blank.
Should an S corporation enter an exempt payee code?
In the broker-transactions row of the chart, the instructions say S corporations must not enter an exempt payee code because they are exempt only for sales of noncovered securities acquired before 2012.
Not tax or legal advice
This page summarizes IRS and USCIS instructions and is not tax, legal or financial advice. A payroll provider, CPA, enrolled agent or attorney can confirm what applies to your situation. Everything runs in your browser; nothing you enter is sent anywhere.