01/28/2026
Business owners, a quick reminder when working with contractors. Always collect a W-9 before any work is performed or payment is made. A W-9 collects a contractor’s legal name, address, and taxpayer ID so you can properly issue a 1099-NEC when required. The W-9 is kept on file and is not sent to the IRS.
Getting a W-9 upfront protects your business and keeps your reporting clean. If a contractor is paid and a dispute arises or the work is not completed, you still have documentation showing who was paid. More importantly, the only way the IRS can match contractor income to a specific person is when a 1099-NEC is filed using the information from the W-9.
If a 1099-NEC is filed and the contractor does not report that income on their tax return, the IRS matching system can flag the difference and issue notices. This process starts with proper reporting. Without a W-9, issuing an accurate 1099 becomes difficult and can lead to compliance issues or penalties.
Best practice is simple. Collect the W-9 before work begins and before any money changes hands, and make it part of your contractor onboarding process.
