Collecting W-9s from vendors and contractors: when, why, and backup withholding
Ask every vendor and contractor for a completed Form W-9 before you pay them the first time. It gives you the name, address and taxpayer ID you need to file a 1099 later. If a payee will not give you a taxpayer ID, the IRS says you may have to withhold tax from their payments at a flat 24% rate, called backup withholding, and send it to the IRS. A W-9 on file avoids all of that.
What a W-9 is and why you want it
Form W-9, Request for Taxpayer Identification Number and Certification, is a one-page form the payee fills in with their legal name, business name if any, tax classification, address and taxpayer ID (a Social Security number, an employer identification number or an individual taxpayer ID), then signs. The IRS's General Instructions for Certain Information Returns suggest you ask a recipient who is a U.S. person to complete Form W-9.
You are the requester, and the information you collect goes on the 1099 forms you file for them, such as the ones in our 1099-NEC guide and in the 1099-MISC rent guide. A missing or wrong taxpayer ID on a return can lead to a penalty on you, and the IRS instructions say so. The W-9 is also your proof that you asked.
When to ask
Ask at the start, not in January. Getting a W-9 from a contractor who has already been paid and moved on is the hard version of this task. The simplest rule for a landlord is: no first payment until the W-9 is back.
- New contractor or vendor you expect to pay $2,000 or more in a year: ask before the first job.
- One-time repairs from a company: ask anyway, since it is easier than predicting the total.
- Existing vendors with no form on file: ask now, and note the date you asked.
- Payees whose name or taxpayer ID changed: ask for a new form.
You do not need a W-9 from your employees (they use payroll forms), from tenants, or from utility companies and other businesses you pay for goods, which are generally not reported on 1099s. When in doubt, ask your tax preparer.
What to check when it comes back
- The name on line 1 matches the name on the invoice or the contract.
- The tax classification box is filled in. A company taxed as a corporation is treated differently from an individual or an LLC taxed as a sole proprietor, which affects who gets a 1099.
- A taxpayer ID is present in Part I, and it looks like an SSN or an EIN in length.
- The form is signed and dated.
- The address is one you can mail a form to in January.
The IRS also allows electronic W-9s if the system meets its requirements, including an electronic signature made under penalties of perjury. A signed PDF or a secure form from a vendor portal can work; an unsigned email with a number in it is not a W-9.
You are required to keep the information on a W-9 confidential. Do not paste taxpayer IDs into group chats or shared spreadsheets, and store the forms in a private folder or document system.
What backup withholding means in dollars
The IRS page on backup withholding says that in certain situations the payer is required to withhold at the current rate of 24 percent. It can apply to payments reported on Form 1099-NEC and rents reported on Form 1099-MISC. The situations the IRS lists include a payee who fails to provide a correct taxpayer ID, and a payee the IRS says underreported interest or dividends.
Example a made-up contractor refuses to fill in a W-9, and you owe the contractor $3,000 for a job. Backup withholding at 24% is 0.24 x $3,000 = $720. You pay the contractor $2,280 and send the $720 to the IRS. Your 1099 for the contractor shows the $3,000 in box 1a and the $720 as federal income tax withheld in box 4. You also report the withholding to the IRS on Form 945, the annual return for withholding that is not from payroll.
If the IRS notifies you that a payee's name and taxpayer ID do not match, you must start withholding on payments made more than 30 business days after you receive the notice, and you stop within 30 days after you receive a certified Form W-9 from the payee. The IRS's general instructions have the full timing rules.
Some owners ask whether they can skip the W-9 for a small job. Nothing stops you from asking, and the cost of asking is a minute of the vendor's time. The cost of not asking shows up in January, when you have a $900 invoice from a handyman you cannot reach and no taxpayer ID to put on a form. Make the W-9 part of how a vendor gets set up, the same way you collect an invoice, and the question never comes up again. Keep a simple list with three columns: vendor, date the W-9 arrived, and the year-to-date total you have paid them.
The practical fix is to avoid this situation. A short note saying "we cannot pay without a W-9" is enough for most vendors.
How DoorKeeping handles it
DoorKeeping keeps documents for each property in one place, so a vendor's W-9 can sit next to the bills you paid them, and it builds the 1099-NEC report from your property's books. It does not e-file 1099s or withhold tax for you. Paying a vendor happens in your own bank, not in DoorKeeping. DoorKeeping does not give tax advice, so check withholding rules with your tax preparer.
Sources
- IRS, General Instructions for Certain Information Returns (requesting a TIN, backup withholding at 24%), read Oct 30, 2026
- IRS, Backup withholding, read Oct 30, 2026
- IRS, Instructions for the Requester of Form W-9, read Oct 30, 2026
Questions
- What is the backup withholding rate?
- The IRS says 24 percent, withheld from payments when a payee does not give a correct taxpayer ID, among other cases. Check the IRS backup withholding page for the current rate.
- When should a landlord collect a W-9?
- Before the first payment to any vendor or contractor you might pay $2,000 or more in a year. Getting it after the work is done is the hard way.
- Can a vendor email me a W-9?
- Yes, if it is signed. The IRS allows electronic forms when the system meets its signature and record requirements. Keep the form private because it holds a taxpayer ID.