topic Commercial rental, landlord files individually, does tenant need do Backup Withholding? in Investors & landlords

Commercial rental, landlord files individually, does tenant need do Backup Withholding?

dspradlin001 — Tue, 10 Feb 2026 10:14:40 GMT

My wife and I have a small building in TN which we rent to a dental practice. We file a joint tax return and do not have a corporation or LLC for the property, it is simply in our name. The renter's accountant has asked us to send them a W-9 which is easy to do. However, the W-9 instructions seem to indicate that we do not have an exclusion and therefor the renter should be withholding 24% for "Backup Withholding" as part of their rent payments. Our renters haven't asked for a W-9 before and we've simply charged the full rent which they've paid. For tax purposes we've shown their rent as income and calculated the federal taxes due at tax time.

Are doing this wrong? Should the tenant be withholding taxes? 1) That is counter to what we've done previously; 2) That seems like a high administrative burden to put on renters; and 3) Doesn't make a lot of sense to me. I'd much rather make estimated quarterly tax payments than have to put that on tenants.

OR ... can I just indicate on the W-9 I'm excluded from Backup Withholding and do things as I have been.

Any guidance appreciated.

Thank you!

Re: Commercial rental, landlord files individually, does tenant need do Backup Withholding?

Critter-3 — Sun, 07 Jan 2024 02:40:18 GMT

Withholding is not done on rents paid. By filling in the W-9 you are automatically exempt from withholding ... read the instructions: https://www.irs.gov/pub/irs-pdf/fw9.pdf

Re: Commercial rental, landlord files individually, does tenant need do Backup Withholding?

VolvoGirl — Sun, 07 Jan 2024 02:48:26 GMT

The instructions under Backup Withholding say.......

You will not be subject to backup withholding on payments you
receive if you give the requester your correct TIN, make the proper
certifications, and report all your taxable interest and dividends on your
tax return.

The TIN is your SSN or EIN if you have one.

Re: Commercial rental, landlord files individually, does tenant need do Backup Withholding?

dspradlin001 — Sun, 07 Jan 2024 17:09:55 GMT

Thank you. Yes, looks like I confused the foreign account focus in the line 4 section. Much appreciated!