When hiring contractors, you must collect Form W-9 before issuing payments. This form provides the contractor’s Taxpayer Identification Number (TIN) and ensures you can file Form 1099-NEC. But what happens if there’s a W-9 contractor refusal?
Why the W-9 Is Critical
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Confirms the contractor’s SSN or EIN.
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Ensures IRS backup withholding rules are applied.
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Allows accurate 1099 form reporting.
Without a W-9, your business risks penalties and reporting errors.
What to Do in a W-9 Contractor Refusal
If a contractor refuses to provide the form, IRS rules require you to withhold 24% of payments under backup withholding and send it to the IRS. Because of this, many businesses stop working with contractors who do not submit the form.
Stay Compliant Easily
Always request a W-9 before paying contractors. Keep the form on file to avoid reporting issues at year-end.
👉 Use our 1099-NEC software to simplify form generation and e-filing.
👉 See official IRS guidance on Form W-9.