W-9 Requirements (Who do we need a W-9 from?)

This is often a misunderstood requirement. Understanding all the information below should equip you with what you need to understand what the W-9 requirements are.

WHY?

The IRS requires businesses to collect W-9 forms to ensure accurate tax reporting and compliance. When you pay $600 or more to a vendor or contractor for services during the tax year, you must report those payments to the IRS using Form 1099.

The W-9 provides the essential information needed to complete that reporting:

• The vendor's legal name
• Their Taxpayer Identification Number (TIN) or Social Security Number
• Their correct business entity classification

This system helps the IRS track income and ensure that independent contractors and service providers are properly reporting their earnings on their own tax returns. Without the W-9, you wouldn't have the correct information to file the required 1099 forms, which could result in penalties for your business.

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Please note that the dollar amount paid out to the contractor does not matter. Before any business transaction is done (ie, payment), you should obtain a W-9 on file.

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W-9 Required

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Rent

Contracted Services

Education Related

Legal or Professional Fees

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W-9 Not Required

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