When Are W-9 Forms Actually Sent Out?
Clarify the timing of Form W-9 requests. This form is a proactive business step to gather vendor tax info, not an annual tax season mailing.
A common point of confusion surrounding tax documents is the timing of IRS Form W-9, Request for Taxpayer Identification Number and Certification. Unlike forms such as the W-2 or 1099 series, which are sent by a specific date each year, the Form W-9 operates on a different timeline. It is not “sent out” on a set schedule by the IRS or employers. Instead, a business or individual, known as the payer, requests a completed W-9 from a vendor, independent contractor, or other entity they intend to pay for services.
The form’s purpose is to collect the payee’s correct name and Taxpayer Identification Number (TIN). This information is then held by the payer for future tax reporting. The process is initiated by the entity making payments, not by the one receiving them. This distinction is important to understanding how and when the form is used in business operations.
The Purpose and Timing of a W-9 Request
The most compliant and practical time for a business to request a Form W-9 is before issuing the first payment to a new independent contractor or vendor. Securing the form at the beginning of a business relationship ensures that the payer has accurate information on file from the outset. This proactive approach prevents potential issues when it is time to prepare year-end information returns, such as Form 1099-NEC, Nonemployee Compensation, which reports payments of $600 or more to non-employees.
This process is part of a business’s accounting procedures, not a task tied to the tax filing season. Waiting until the end of the year to collect W-9s can create administrative burdens and increases the risk of errors. If a contractor is no longer available or unresponsive, the business may lack the necessary information for its mandatory IRS filings, leading to potential penalties. Therefore, best practice dictates that no payment should be made until a completed W-9 is received.
Information Required on Form W-9
To complete a Form W-9, a payee must provide several specific pieces of information. The form is a certification of one’s taxpayer details for the payer’s records. The primary fields include the payee’s legal name as shown on their tax return and, if different, their business name or “doing business as” (DBA) name.
A section of the form requires the payee to identify their federal tax classification. This involves checking a box to indicate if they are an individual/sole proprietor, a C Corporation, an S Corporation, a Partnership, a trust/estate, or a limited liability company (LLC). For an LLC, the payee must also specify its tax classification. This detail is important for the payer’s information reporting requirements.
The most important information on the form is the Taxpayer Identification Number (TIN). For individuals and sole proprietors, this is typically their Social Security Number (SSN). For most other business entities, such as corporations and partnerships, it is their Employer Identification Number (EIN). The payee must also provide their current mailing address and sign and date the form, certifying that the TIN provided is correct and that they are not subject to backup withholding. The official form can be downloaded from the IRS website.
Consequences of Not Receiving a Completed W-9
When a payer fails to obtain a completed Form W-9 from a vendor, they face direct consequences mandated by the IRS. The primary repercussion is the requirement to implement backup withholding. This rule compels the payer to withhold a specific percentage from any payments made to the vendor and remit those funds directly to the IRS.
The current backup withholding rate is set by the IRS at 24%. This means if a business pays a vendor $1,000 for services but does not have a W-9 on file, it must withhold $240 from that payment and send it to the IRS. The vendor then receives the net amount of $760. This process continues for all payments until the vendor provides a completed W-9 with a valid Taxpayer Identification Number.
Failing to collect a W-9 and subsequently failing to perform backup withholding can expose the payer to penalties. These penalties are for filing an information return (like a 1099-NEC) with incorrect or missing information. Obtaining the W-9 is a fundamental step in risk management for any business paying independent contractors.