Subcontractor W-9 and 1099-NEC: a GC checklist
Collect a W-9 before the first payment, match the name and TIN, know when backup withholding applies, and file 1099-NEC at the $2,000 threshold by January 31.
Updated
Collect a signed Form W-9 from every subcontractor before the first payment, check the name and taxpayer identification number (TIN), and file Form 1099-NEC by January 31 for each one you paid $2,000 or more for services during the year. The $2,000 threshold applies to payments made after December 31, 2025; before that it was $600. Payments to corporations are generally not reported, but attorneys' fees are.
Why collect the W-9 before the first payment?
The W-9 gives you the subcontractor's legal name, federal tax classification, and TIN. You need all three to decide whether a 1099-NEC is required and to file it. The IRS says a properly completed and signed W-9 can be relied on to avoid backup withholding.
If a payee does not give you a TIN, you must backup withhold 24% of reportable payments. For nonemployee compensation this applies right away, even if the payee wrote Applied For: the 60-day grace period covers only interest, dividends, and certain readily tradable instruments.
You keep the W-9 in your files; it is not sent to the IRS. The current revision is dated March 2024.
What should you check on the W-9?
- Line 1 name. For a sole proprietor or a single-member LLC that is a disregarded entity, line 1 is the owner's name and the business name goes on line 2. The TIN must match the line 1 name.
- Line 3a classification. Individual or sole proprietor, partnership, C corporation, S corporation, or LLC with its tax classification.
- Line 4 exemptions. An exempt payee code, if entered, should fit the entity. Individuals and sole proprietors are generally not exempt.
- TIN, signature, and date. An SSN or EIN in the right format, signed by the payee.
- Consistency. The legal name should match the subcontract, the certificate of insurance, and the license.
How does IRS TIN Matching work?
The IRS offers free online TIN Matching through e-Services to payers who file information returns subject to backup withholding, including Form 1099-NEC. You enter a name and TIN, and it tells you whether the combination matches IRS records. Interactive matching checks up to 25 at a time; bulk matching takes a file of up to 100,000.
Matching before you file lowers the chance of a CP2100 or CP2100A notice, which the IRS sends when a name and TIN on a filed return do not match. If one arrives, follow IRS Publication 1281. It can require you to start backup withholding on that subcontractor.
Which subcontractors get a 1099-NEC?
The test is payments for services, in the course of your business, to someone who is not your employee, totaling $2,000 or more in the year.
| Payee | 1099-NEC at $2,000 or more? |
|---|---|
| Individual or sole proprietor | Yes |
| Single-member LLC treated as a disregarded entity | Yes, under the owner's name and TIN |
| Partnership, or LLC taxed as a partnership | Yes |
| C or S corporation, or LLC taxed as one | Generally no |
| Law firm, even if incorporated | Yes, for attorneys' fees |
| Supplier paid for materials only | No, merchandise is not reported |
Parts and materials go in box 1 when supplying them was incidental to the service, such as a repair that includes parts. Payments made by credit card or through a third-party payment network are reported by the payment settlement entity on Form 1099-K, not by you on a 1099-NEC.
When is the 1099-NEC due?
Furnish the recipient's copy and file with the IRS by January 31, or the next business day if that falls on a weekend or legal holiday. For payments made in 2026, January 31, 2027 is a Sunday, so the deadline is Monday, February 1, 2027.
If you file 10 or more information returns in total for the year, counting Forms W-2 and all 1099 types together, you must file electronically. The IRS IRIS Taxpayer Portal lets you file 1099s online at no cost. The $2,000 threshold may be adjusted for inflation starting in 2027, so check IRS.gov each year.
A year-end checklist
- Run a payments report by vendor for the year.
- Flag every non-corporate vendor, and every law firm, paid $2,000 or more for services.
- Confirm a current W-9 is on file for each one, and request any that are missing.
- TIN match the list if you are enrolled.
- File and furnish by the deadline, and keep copies.
Keep tax and insurance names in sync
The W-9 name should match the named insured on the certificate of insurance; otherwise you may be paying one entity while another is insured. See certificate of insurance red flags and subcontractor prequalification for what else to collect up front.
This is general information, not tax advice. Ask a tax professional about your situation.
Where ComplySub fits
Subcontractors can keep a W-9 in their ComplySub compliance packet next to their certificate of insurance and license, so a general contractor gets all three from one link. ComplySub stores the W-9. It does not match TINs, withhold, or file 1099s.
This guide is general information, not legal or insurance advice. Insurance and licensing rules vary by state, carrier, and contract; confirm what applies to you with your insurance professional, attorney, or licensing board.