When Is a W-9 Required? Exceptions, Refusals, and Wrong Forms

A W-9 is required whenever a U.S. business, bank, or other payer needs your taxpayer identification number to report payments to the IRS. That covers independent contractor work, opening a bank or brokerage account, closing on real estate, collecting reportable gambling winnings, and having debt canceled, among other situations. The form itself never goes to the IRS. You hand it to whoever requested it, and they use the information to prepare your year-end tax documents.¹

One 2026 change matters for context: the reporting threshold for most contractor payments rose from $600 to $2,000, so businesses only need to file a 1099-NEC or 1099-MISC when they pay a person or non-corporate entity at least that amount in a calendar year.² The threshold governs when a 1099 is filed. The W-9 that feeds that 1099 usually gets requested well before anyone knows whether the year’s total will cross the line.

Contractor and Freelance Work

The most common W-9 request comes when a business hires you as an independent contractor rather than an employee. If a company expects to pay you $2,000 or more during 2026 for services, it must report those payments on Form 1099-NEC, and it needs your legal name and TIN to do so.³

In practice, most businesses ask for the W-9 before they cut the first check, even when they aren’t sure the total will reach $2,000. Chasing a contractor’s TIN months later, as 1099 deadlines approach, creates problems for everyone. If you do freelance or consulting work, expect a W-9 request at the start of nearly every new client relationship.

Form 1099-NEC covers non-employee compensation for services. Form 1099-MISC covers other reportable payments such as rent, royalties, and prizes. Both share the $2,000 reporting floor for 2026, with one exception: royalties still trigger reporting at just $10.³ Starting in 2027, the $2,000 threshold will adjust annually for inflation.

The Corporate Exception

Businesses generally do not need to collect a W-9 from an incorporated vendor, whether a C corporation or S corporation, because payments to corporations are exempt from 1099 reporting. Two exceptions matter: payments to corporations for legal services and payments for medical or health care services still require reporting, and therefore still require a W-9.⁴ Hire a law firm organized as a corporation and you still need their W-9.

Bank, Brokerage, and Investment Accounts

Banks, credit unions, and brokerage firms ask for a W-9 when you open an account. Federal law requires these institutions to verify your taxpayer identification number so they can accurately report interest, dividends, and investment proceeds on year-end forms like 1099-INT and 1099-DIV.⁵ Decline to provide a certified TIN and the institution must withhold 24% of certain payments and send that money to the IRS instead of to you.

Some payees are exempt from backup withholding and can note that on the W-9 using an exempt payee code. Corporations, tax-exempt organizations, government agencies, and registered securities dealers all qualify for exemptions on specific payment types.¹ Individual account holders and sole proprietors generally are not exempt, so most people can skip those lines.

Real Estate Closings

The settlement agent handling a property sale must report the gross proceeds to the IRS on Form 1099-S, which means they need the seller’s TIN before the transaction closes.⁶ If you’re selling real estate, expect a W-9 or a substitute form in the closing package.

Gambling Winnings

Gambling establishments may request a W-9 or equivalent identification when paying out reportable winnings. For 2026, the reporting threshold for Form W-2G, the gambling equivalent of a 1099, is $2,000, and a completed W-9 counts as an acceptable form of identification at the payout window.⁷ The withholding threshold sits higher: casinos withhold 24% only when winnings minus the wager exceed $5,000 on certain bet types.

Canceled or Forgiven Debt

Creditors that cancel or forgive $600 or more of your debt must report it on Form 1099-C, and they’re required to make a reasonable effort to collect your TIN. A W-9 is one of the standard tools for doing so. Unlike other W-9 situations, a debtor is not required to certify the TIN under penalties of perjury in this context.⁸

When a W-9 Is the Wrong Form

Not everyone who receives payments from a U.S. business should fill out a W-9. Two situations call for a different form entirely.

Employees Use Form W-4

If you’re hired as an employee rather than an independent contractor, your employer collects your tax information through Form W-4, not a W-9. The W-4 tells the employer how much federal income tax to withhold from your paycheck. A W-9 signals the opposite: no withholding at the source, and you’re responsible for paying your own taxes. If a company hands you a W-9 while treating you as an employee with set hours, supervision, and company-provided tools, that’s worth questioning before you sign.

Foreign Persons Use Form W-8

Form W-9 is only for U.S. persons. The IRS defines a U.S. person as a citizen, resident alien, or any partnership, corporation, or trust created under U.S. law.¹ Nonresident aliens and foreign entities should not complete a W-9. Instead, provide the requester with the appropriate Form W-8. Individuals typically use Form W-8BEN, and foreign entities use Form W-8BEN-E.⁹ These forms establish foreign status and may invoke tax treaty benefits that reduce or eliminate U.S. withholding.

What Happens If You Refuse

Refusing to hand over a W-9 doesn’t get you out of reporting. It triggers backup withholding. The payer starts holding back 24% of your payments and sends that money directly to the IRS, and that continues until you provide a valid TIN.⁵ You can claim the withheld amount as a credit on your tax return, but you lose the cash flow in the meantime, and if your actual tax rate sits below 24%, you’ve essentially given the government an interest-free loan.

Backup withholding also applies if the IRS notifies a payer that the TIN you provided doesn’t match their records, or if you previously underreported interest and dividend income. In those cases, the IRS sends a “B notice” to the payer, who must begin withholding regardless of what your W-9 says.

The certification on the W-9 carries its own weight. Signing under penalties of perjury that your TIN is correct is a legal statement. The penalty for making a false statement that prevents backup withholding is $500, and willfully falsifying the certification can lead to criminal fines and imprisonment.¹

Keeping Your W-9 Current

A completed W-9 does not expire on a fixed date. It remains valid until the information on it changes or the requester has reason to believe it is no longer accurate.¹⁰ Submit a new one if you change your legal name, get a new TIN, change your business structure, or receive an IRS notice that your name and TIN don’t match. Some businesses request refreshed W-9s every few years as a routine compliance practice, even when nothing has changed.

Because the form contains your Social Security Number or EIN, treat it like any sensitive financial document. When you send a completed W-9, use encrypted email, a password-protected portal, or physical mail rather than a plain email attachment. The receiving business is responsible for storing the form securely for as long as it may be relevant for tax reporting. IRS guidance on employment tax records suggests a minimum retention period of four years, and most businesses apply a similar standard to W-9s.¹¹

1
Internal Revenue Service. Form W-9 (Rev. March 2024)
2
Internal Revenue Service. FS-2025-08, Form 1099-K Frequently Asked Questions
3
Internal Revenue Service. 2026 Publication 1099 (Draft)
4
Internal Revenue Service. Am I Required to File a Form 1099 or Other Information Return
5
Office of the Law Revision Counsel. 26 USC 3406 – Backup Withholding
6
Internal Revenue Service. Instructions for Form 1099-S (04/2025)
7
Internal Revenue Service. Instructions for Forms W-2G and 5754 (01/2021)
8
Internal Revenue Service. Instructions for Forms 1099-A and 1099-C (04/2025)
9
Internal Revenue Service. About Form W-8 BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals)
10
Internal Revenue Service. Instructions for the Requester of Form W-9
11
Internal Revenue Service. Employment Tax Recordkeeping