When do I need to collect W-9 forms from subs?
Collect a W-9 before you make the first payment. Not after. Not at year-end when you’re scrambling to file 1099s. Before any money changes hands.
The IRS requires you to file a 1099-NEC for any unincorporated subcontractor or vendor you pay $600 or more during the tax year. To file that form, you need their legal name, address, taxpayer identification number, and entity type. All of that information comes from the W-9. If you don’t have it when 1099s are due in January, you’re stuck chasing people down during the busiest time of year.
Make it part of your onboarding process. When you bring on a new sub, the W-9 should be collected alongside your contract or scope of work. Treat it the same way you’d treat proof of insurance or a signed agreement. No W-9, no first check. That one policy solves the vast majority of headaches business owners run into at tax time.
If a sub refuses to provide a W-9, the IRS actually requires you to withhold 24% of their payments as backup withholding. Most business owners don’t know this rule exists, and even fewer enforce it. But it gives you real leverage if someone is dragging their feet. Let them know you’re required to withhold without the form, and you’ll usually get it back quickly.
W-9s don’t technically expire, but it’s good practice to request updated forms if a sub’s business structure changes or if you haven’t worked with them in a couple of years. Addresses change, entity types change, and filing a 1099 with outdated information creates problems for both parties.
Keep your W-9s organized digitally. A shared folder or a simple spreadsheet tracking who you’ve collected forms from, the date received, and their TIN makes January much easier. When it’s time for 1099 preparation, having everything in one place means the process takes hours instead of weeks of back-and-forth emails and phone calls.
The biggest mistake small businesses make is treating W-9 collection as a year-end task. By December, that sub you paid back in March has moved on to other projects and isn’t returning your calls. Collecting upfront eliminates that problem entirely. If you work with multiple subcontractors regularly, building this into your payment workflow saves real time and stress. A small business accounting firm can help you set up a system so nothing slips through the cracks, but the core habit is simple. Get the W-9 before you write the first check, and everything else falls into place.
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