How to Request a W-9: Steps, TIN Verification & Penalties

To request a W-9, send IRS Form W-9 (or an IRS-compliant substitute) to any U.S. payee before you make your first payment, ask them to complete every section and sign the certification, and store the returned form securely so you can use the taxpayer identification number on your year-end information returns. Requesting the form up front, rather than at tax time, is what separates routine compliance from a January scramble.

When to Request the Form

You need a W-9 any time you make a payment the IRS requires you to report on an information return. The best-known trigger is $600 or more in nonemployee compensation during a calendar year, reported on Form 1099-NEC, but the form covers a much wider set of payments:¹

Interest payments of $10 or more (Form 1099-INT)
Dividend payments (Form 1099-DIV)
Real estate transaction proceeds (Form 1099-S)
Canceled debt (Form 1099-C)
Mortgage interest received (Form 1098)
Rents, prizes, awards, and medical or health care payments of $600 or more (Form 1099-MISC)

Because you rarely know at the start of a working relationship whether total payments will cross a reporting threshold, collect a W-9 from every non-employee payee before the first check goes out. It is faster to gather one form up front than to chase a signature from a former contractor in January.

Who Needs to Send One Back

Send the form to every non-employee payee you might report on. Some of them will fill it out and turn out to be exempt from receiving a 1099; that is fine. The form’s classification and exemption fields are what tell you whether reporting applies, so you want the completed form on file either way.

Standard C and S corporations are generally exempt from 1099 reporting for ordinary payments. Two exceptions matter enough to call out: attorney fees and payments for medical or health care services must be reported regardless of whether the payee is incorporated.¹ If you are paying a law firm organized as a professional corporation or a medical group, do not skip the W-9 on the assumption the corporate exemption applies.

One boundary worth stating clearly: Form W-9 is only for U.S. persons, meaning citizens, resident aliens, and domestic entities. A foreign individual payee should complete Form W-8BEN instead, and foreign entities use Form W-8BEN-E.² A foreign national living in the United States who meets either the green card test or the substantial presence test is a U.S. resident for tax purposes and does use the W-9.³ Sending the wrong form creates withholding problems for both sides.

How to Send the Request

Download the current Form W-9 from the IRS website and check the revision date in the upper left corner. The current version is dated March 2024. You can deliver the request on paper, by fax, or electronically, and most businesses now use a digital system.

An electronic W-9 system has to meet specific IRS standards. It must ensure the information received matches what was sent, log every submission, verify that the person submitting is the payee named on the form, collect the same information as the paper version, produce a hard copy on IRS request, and require an electronic signature under the same penalty-of-perjury language as the paper form.⁴

If you build a substitute W-9 rather than using the official IRS form, you cannot bundle unrelated agreements into it for the payee to sign alongside the required certifications. When a single signature line covers both the IRS certifications and your own provisions, the certifications must be visually highlighted, and this statement must appear immediately above the signature line: “The IRS does not require your consent to any provision of this document other than the certifications required to avoid backup withholding.”⁴

Every completed W-9 contains a Social Security Number or EIN, so treat it as sensitive information. Digital copies belong in encrypted systems with restricted access. Paper copies belong in locked storage. Emailing an unencrypted W-9 as a PDF attachment is one of the most common security mistakes businesses make with this form.

What a Complete Form Should Contain

When the form comes back, check five things before you file it away. Missing or wrong information here is what triggers penalties later.

Legal name. The name on line 1 must match what appears on the payee’s income tax return. A trade name or “doing business as” name goes on a separate line, not on line 1.¹

Federal tax classification. Exactly one box: individual/sole proprietor, C corporation, S corporation, partnership, trust/estate, or LLC (noting the LLC’s tax classification). This is what tells you whether the payee is one of the categories you actually have to report on.

Taxpayer Identification Number. Individuals typically provide a Social Security Number, businesses use an Employer Identification Number, and a sole proprietor with an EIN can enter either. The TIN must match the name on line 1, or you will end up in the backup withholding process later.

Exemption codes. If the payee qualifies, they enter a numeric code for backup withholding exemption and, where relevant, a letter code for FATCA reporting exemption.

Signature. The payee signs under penalty of perjury, certifying that the TIN is correct, that they are not subject to backup withholding (or acknowledging that they are), and that they are a U.S. person. Willfully falsifying that certification is a federal crime, not a paperwork infraction.⁵

When the Payee Won’t Respond

If a payee refuses to return the W-9, or sends back a TIN that is obviously wrong (fewer than nine digits, contains letters, clearly fabricated), you are required to begin backup withholding immediately. The rate is 24% of the payment amount, deducted before you pay the contractor and remitted to the IRS.⁶

Backup withholding can also come from the IRS side after you have already filed. If the TIN and name combination on your information return does not match IRS records, you will receive a CP2100 or CP2100A notice. You then send the payee a “B” notice explaining the mismatch, and if they do not correct the problem, you begin withholding on future payments.⁷

If you should have been withholding and were not, you become personally liable for the tax you failed to collect. The IRS treats withheld-but-not-remitted funds the way it treats employment tax obligations: as money that was never yours to keep.⁶

Verify the TIN Before You File

You do not have to wait for the IRS to tell you a TIN is wrong. The IRS TIN Matching Program lets you check TIN and name combinations against IRS records before you submit your information returns. It is free, available as both an interactive single-lookup tool and a bulk-processing option, and requires registration on the IRS Payer Account File.⁸

Catching mismatches before filing avoids the B notice cycle and the penalties that come with filing incorrect returns. If you issue more than a handful of 1099s each year, TIN matching pays for itself quickly.

How Long to Keep the Form

Keep completed W-9 forms on file for at least four years after the last tax year in which you relied on the form for reporting.⁹

A W-9 has no formal expiration date. It stays valid until you learn, or have reason to believe, that the payee’s information has changed. A name change, a new business structure, or a different TIN all call for a fresh form, requested before your next payment.⁴

Penalties If You Get It Wrong

Filing an information return with a missing or incorrect TIN triggers penalties under IRC 6721. For returns due in 2026, the per-return amounts scale with how long the error goes uncorrected:¹⁰

$60 per return if corrected within 30 days of the due date
$130 per return if corrected after 30 days but by August 1
$340 per return if filed after August 1 or not filed at all
$680 per return for intentional disregard

The annual cap for most businesses is based on the statutory maximum of $3,000,000 (adjusted for inflation), with a lower $1,000,000 cap for small businesses with gross receipts of $5,000,000 or less. There is no annual maximum for intentional disregard.¹¹

The penalties reach the other side of the transaction too. A payee who fails to furnish a TIN when requested faces a $50 civil penalty per failure, up to $100,000 per calendar year.¹² Documenting your request in writing, whether by email or through your electronic system, protects you if a payee later claims they were never asked.

1
Internal Revenue Service. Form W-9 (Rev. March 2024) Request for Taxpayer Identification Number and Certification
2
Internal Revenue Service. Instructions for Form W-8BEN
3
Internal Revenue Service. Determining an Individual’s Tax Residency Status
4
Internal Revenue Service. Instructions for the Requester of Form W-9
5
Internal Revenue Service. Criminal Statutory Provisions and Common Law
6
Office of the Law Revision Counsel. 26 USC 3406 – Backup Withholding
7
Internal Revenue Service. Backup Withholding “B” Program
8
Internal Revenue Service. Taxpayer Identification Number (TIN) Matching
9
Internal Revenue Service. Forms and Associated Taxes for Independent Contractors
10
Internal Revenue Service. Information Return Penalties
11
Office of the Law Revision Counsel. 26 USC 6721 – Failure to File Correct Information Returns
12
Office of the Law Revision Counsel. 26 USC 6723 – Failure to Comply With Other Information Reporting Requirements