Form W-9 for Contractors: TINs, Backup Withholding and the 1099-NEC
Before you pay an independent contractor in the US, you need their taxpayer identification number (TIN). The usual way to get it is Form W-9. Collecting the form is easy. Making sure the name and number on it are right, before it matters for backup withholding and the 1099-NEC, is the part that takes care.
This post covers what a W-9 asks for, how to check it, when backup withholding applies, the new 1099-NEC threshold, and how to collect W-9s in WorkZerk.
What a W-9 is and when to ask for it
Form W-9 is how a US person, including a resident alien, gives their correct TIN to a business that has to file an information return about them (About Form W-9). The contractor fills it in, signs it and gives it to you. It never goes to the IRS.
Ask for it before the first payment. If a contractor has not given you a TIN, payments for their services are subject to backup withholding straight away. There is no grace period for nonemployee compensation, even when the contractor writes "Applied For" (Instructions for the Requester of Form W-9).
The current form is the March 2024 revision (Form W-9 PDF). The IRS has posted a June 2026 draft of the requester instructions, marked "not for filing". Until a final version is released, keep using the March 2024 form.
What is on the form
| Line | What the contractor enters |
|---|---|
| 1 | Their name, as shown on their tax return. For a single-member LLC that is disregarded for tax purposes, this is the owner's name. |
| 2 | A business name or disregarded entity name, if different. |
| 3a | Federal tax classification: individual/sole proprietor, C corporation, S corporation, partnership, trust/estate, LLC (with its tax classification), or other. |
| 3b | Only for partnerships, trusts and estates with foreign partners, owners or beneficiaries. |
| 4 | Exemption codes, if any: an exempt payee code (for backup withholding) and a FATCA exemption code. |
| Part I | The TIN: an SSN, ITIN or EIN. |
| Part II | The signed certification, made under penalties of perjury. |
A sole proprietor with an EIN may enter either their SSN or their EIN. A disregarded single-member LLC enters the owner's SSN (or the owner's EIN, if they have one). An LLC taxed as a corporation or partnership enters its own EIN (Form W-9).
Line 3a matters for your 1099s. Payments to corporations are generally not reported on Form 1099-NEC, with exceptions such as payments for legal services (Instructions for Forms 1099-MISC and 1099-NEC).
Checking the TIN
The IRS runs TIN Matching, which checks a name and TIN combination against IRS records before you file. It is only for payers, and their authorized agents, who submit information returns. You need an IRS account, a separate TIN Matching application through e-Services, and the payer has to be listed in the IRS Payer Account File, which the IRS says payers are added to if they filed Forms 1099 within the last two years.
There are two options (TIN matching tools):
- Interactive: up to 25 name and TIN pairs at a time, with results straight away.
- Bulk: up to 100,000 pairs in a text file, with results within 24 hours.
If you are not eligible yet, at least check that the form is signed, that line 1 matches the name the contractor invoices under, and that the box ticked on line 3a fits the TIN they gave (an EIN for a corporation, for example).
Backup withholding
Backup withholding is federal income tax you take out of a payment and send to the IRS yourself. The rate is 24% (Backup withholding). For contractor payments it applies when:
- The TIN is missing. The contractor did not give you one, or gave you one that is obviously wrong (too few digits, for example). Start withholding immediately (Backup withholding "B" program).
- The IRS says it does not match. After you file, the IRS can send a CP2100 or CP2100A notice listing payees whose name and TIN do not match its records. If your records agree with what you filed, you send that contractor a "B" notice.
The B notice rules set the timing:
| Step | Deadline |
|---|---|
| Send the first B notice, with a blank W-9 | Within 15 business days of the CP2100 date or the day you received it, whichever is later |
| Start backup withholding if no signed W-9 comes back | No later than 30 business days after that same date |
| Second notice (same payee listed again within three years) | The contractor has to validate their TIN with the SSA or the IRS, not just send a new W-9 |
| Stop withholding once you have what you need | Within 30 calendar days |
If you withhold, the amount goes in box 4 of the contractor's 1099-NEC, and you file a 1099-NEC for anyone you withheld from, whatever the amount (Instructions for Forms 1099-MISC and 1099-NEC). Backup withholding is reported to the IRS on Form 945. If you should have withheld and did not, you can be liable for the amount yourself (Instructions for the Requester of Form W-9).
The 1099-NEC threshold is now $2,000
For payments made after December 31, 2025, you report nonemployee compensation on Form 1099-NEC when you pay a contractor $2,000 or more in a year. It was $600 before (Form 1099-NEC and independent contractors). The IRS says the amount may be adjusted for inflation from calendar year 2027 (Instructions for Forms 1099-MISC and 1099-NEC).
A few things stay the same:
- Only payments made in the course of your trade or business count. Personal payments are not reportable.
- Payments made by credit card or through a payment app are reported by the card company or app on Form 1099-K, not by you on a 1099-NEC.
- Payments to attorneys keep their own rules, so check the instructions for those.
Filing deadlines
Form 1099-NEC is due to the contractor and to the IRS by January 31 (Instructions for Forms 1099-MISC and 1099-NEC). When a due date falls on a weekend or legal holiday, the next business day counts as on time (Publication 1099). January 31, 2027 is a Sunday, so forms for 2026 payments are due Monday, February 1, 2027.
If you file 10 or more information returns in a year, counting all types together, you must file them electronically. The IRS's Information Returns Intake System (IRIS) is a free way to do it. On the contractor's copy you may show their TIN truncated, as ***-**-1234, but the copy you file with the IRS has to show it in full.
Penalties can apply to a return with a missing or incorrect TIN, unless you can show reasonable cause. A W-9 collected before the first payment is part of how you show it.
Foreign contractors use a W-8BEN instead
A foreign person cannot give you a W-9 (Instructions for the Requester of Form W-9). A foreign individual gives you Form W-8BEN instead, and a foreign entity uses Form W-8BEN-E. A foreign person who gives you the right W-8 is generally exempt from backup withholding and 1099 reporting (Withholding and reporting obligations). Pay for services performed outside the US is foreign-source income, but work done inside the US can be subject to withholding, so check Publication 515 before you pay.
Keeping SSNs secure
A W-9 from a sole proprietor usually carries their Social Security number, which is exactly what identity thieves want. The FTC's guide for business comes down to five steps: know where the data is, keep only what you need, lock it, dispose of it properly, and plan for a breach. It also says to use SSNs only for required and lawful purposes, such as tax reporting, and never as an ID number. In practice: do not take W-9s by email, limit who can open them, and delete them when you no longer need them.
When to ask for a fresh W-9
The form itself says a contractor must give you a new W-9 if the name or TIN on the account changes (Form W-9). Ask for one when a contractor:
- changes their legal name
- moves from sole proprietor to an LLC or corporation, or changes how their LLC is taxed
- gets an EIN and wants to use it instead of their SSN
- is listed on a CP2100 or CP2100A notice
This is general information, not tax advice. Check the IRS pages linked above, or ask your tax advisor, for your own situation.
What WorkZerk does with a W-9
WorkZerk collects the form and keeps it private:
- Each contractor opens the IRS form from a link on their portal, fills it in and uploads it from their phone, with no account or password.
- The W-9 ask is marked Sensitive: the file is stored encrypted, its name shows to your team but only admins can open it, and every time someone opens it is recorded in the access log.
- You approve or reject each form, and WorkZerk records who did it and when.
- You can set sensitive files to be deleted automatically 30 days to 7 years after a portal closes.
What it does not do: WorkZerk does not run TIN Matching, withhold tax, or prepare or file 1099s. Those stay with you and your accounting software. WorkZerk gives you the signed form, the dates you record, and CSV downloads to hand to whoever prepares your 1099s.
Setting it up in WorkZerk
1. Turn on two-factor authentication
Asking people to upload documents needs two-factor authentication on your account. Set it up under Account, then Two-factor authentication (opens in WorkZerk in a new tab).
2. Start from the US contractor pack
Open Requests (opens in WorkZerk in a new tab), click Request packs, open Start from a template, pick United States and add Contractor onboarding (United States). It asks for the Form W-9 (required, sensitive, linked to the IRS page), a certificate of insurance, an optional business license and workers' compensation certificate, and bank details for payment, with the account number marked sensitive. See starter request packs.
3. Add the fields for your check
Open Fields (opens in WorkZerk in a new tab) in the sidebar and add:
- Federal tax classification, a Choice field with the line 3a options you see in practice.
- TIN checked on, a Date field your team fills in after each check.
Optionally, add an Upload field called Form W-9 and mark it Sensitive. Then, on the pack's W-9 ask, turn on Also save their file to a contact field and pick it. The form then sits on the contractor's contact record and counts on every portal they are on. See custom contact fields.
4. Create a portal and add the pack
Open Portals (opens in WorkZerk in a new tab) and click New portal, or use an onboarding portal you already run. Add the pack from the portal's Requests panel, then a Fields request for Federal tax classification.
If you also pay contractors outside the US, click + Insert, choose Upload, and name it "Form W-8BEN (only if you are not a US person)". Set Min files to 0 so it is optional, tick Sensitive, and use Attach a document, link or YouTube video to link the IRS page.
5. Add your contractors
Add contractors to the portal and send each one their private link, or share the portal's self-registration link.
6. Review each W-9 and record the check
Uploaded forms wait under Needs review on Requests (opens in WorkZerk in a new tab). Because the W-9 is sensitive, an admin opens it. For each one:
- Check the form is signed and dated, and that line 1 matches the name on the contractor's invoices.
- Check the line 3a box fits the TIN they gave.
- Run TIN Matching if you are eligible, or check the form against what you know.
- Approve the form, or reject it with a reason so the contractor sends a corrected one.
- Enter today's date in TIN checked on on their contact record.
7. Hand the details over at year end
Open Reports, then Contacts (opens in WorkZerk in a new tab), and use Download CSV for every contractor's classification and check date side by side. The uploaded forms come from the Submitted files download on the export page (opens in WorkZerk in a new tab). Sensitive files are left out unless you tick the box and enter your password, and that download is recorded in the access log. See keeping sensitive information private.
Getting started
Start a free WorkZerk trial at workzerk.com, then work through the steps above. If you get stuck, the getting started guide walks through a first portal end to end, or email us at [email protected].