Form W-9 is the form a contractor fills in to give the business paying them their correct name and Taxpayer Identification Number (TIN). Form 1099-NEC is the form that business uses to report the payments it made to people who aren't its employees. The W-9 comes first and stays in the payer's files; the 1099-NEC is the return filed with the IRS.
If you've just started freelancing or just hired your first contractor, these two forms arrive as a pair and it's easy to mix them up. They're two halves of the same job. The Internal Revenue Service explains both on its forms pages and its guidance for businesses that use independent contractors, and everything here comes from those pages.
Form W-9 and Form 1099-NEC side by side
| Form W-9 | Form 1099-NEC | |
|---|---|---|
| Full name | Request for Taxpayer Identification Number and Certification | Nonemployee Compensation |
| Who fills it in | The person being paid, such as an independent contractor | The business that paid for the services |
| What it does | Gives your correct name and TIN to whoever must file an information return | Reports payments to non-employees that reach the reportable payment threshold |
| Where it goes | To the payer, who keeps it on file for four years | To the IRS, as an information return |
| When it's needed | Once the business decides you're an independent contractor | After a tax year in which payments reached the threshold |
| Not used for | Employees starting a job | Employee wages, which go on Form W-2 |
What Form W-9 is for, beyond contractors
The IRS says you use Form W-9 to give your correct TIN to the person who is required to file an information return reporting something about you. Contractor pay is the familiar case, but the IRS lists others: real estate transactions, mortgage interest you paid, the acquisition or abandonment of secured property, cancellation of debt and contributions you made to an IRA. So a bank or a property buyer can ask you for one too, not just a client.
For a business, the IRS guidance is that once you've decided the person you're paying is an independent contractor, the first step is to have them complete Form W-9. You don't send it to the IRS: you keep it in your files for four years, in case the worker or the IRS has questions later.
Who files Form 1099-NEC, and how
The business does. The IRS says you must use Form 1099-NEC to report payments made during the tax year that total or exceed the reportable payment threshold to people not treated as employees, for services performed for your trade or business. The threshold amount, the exceptions where no form is needed and the electronic filing rules are set out in the IRS Instructions for Forms 1099-MISC and 1099-NEC, so check that document for the current threshold rather than relying on an old one you've heard.
Two practical points from the IRS page. First, Forms 1099-NEC must be e-filed if you file 10 or more information returns in a calendar year, either through the Information Returns Intake System (IRIS) or the older FIRE system. Second, the IRS is retiring FIRE: beginning with the 2027 filing season, for Tax Year 2026 returns, IRIS becomes the only electronic filing platform for those returns. Contractors who hire their own employees or subcontractors have the same reporting duties for those workers.
The 24% rule when a W-9 never comes back
Here's the detail many small businesses miss. The IRS says that, as of Nov 2026, you must withhold 24% from reportable payments of nonemployee compensation to a U.S. person who hasn't provided their TIN in the required way, or when the IRS tells you the TIN they gave is incorrect and they don't certify it as required. This is called backup withholding, and a payer who has to do it must also file Form 945.
Payments to a nonresident alien contractor for independent personal services may be subject to 30% withholding, unless a tax treaty or the law sets a lower rate. And if you can't tell whether a payee is a foreign or a U.S. person, the IRS says the presumption rules make you treat them as a non-exempt U.S. person and deduct backup withholding. In other words, a missing W-9 isn't just paperwork: it changes what you pay out.
Contractor or employee: the IRS test comes first
Neither form matters until you've decided whether the worker is a contractor at all. For an employee, the IRS says you generally withhold income tax, Social Security and Medicare taxes, pay the matching employer share and pay unemployment tax. For an independent contractor, you generally don't withhold or pay any of those.
The IRS looks at the degree of control and independence across three categories: behavioural (does the company control what the worker does and how), financial (who controls the business side of the job, such as expenses and tools) and the type of relationship (contracts, benefits, and whether the work is a key part of the business). There's no set number of factors that decides it, so the IRS says to look at the whole relationship and document the factors you used. A remote worker is still an employee if you control what's done and how. If it's still unclear, either side can file Form SS-8 and the IRS will decide, though it can take at least six months.
Getting this wrong has consequences. If you treat an employee as a contractor with no reasonable basis, the IRS says you may be held liable for employment taxes for that worker, and workers who believe they've been misclassified can use Form 8919 to report uncollected Social Security and Medicare tax.
If you work for yourself, my tax tips for the self-employed cover the rest of the year, and here's what an independent contractor agreement should include.
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My advice on handling W-9s and 1099s
It depends which side of the payment you're on. If you're the contractor, fill in the W-9 promptly and accurately, because a missing or wrong TIN can mean 24% held back from your pay. If you're the business, settle the contractor or employee question first, collect a W-9 before the first payment, keep it for four years, and check the Internal Revenue Service instructions for Forms 1099-MISC and 1099-NEC each filing season for the threshold and e-filing rules. When in doubt, a tax professional will save you more grief than they take.
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Frequently asked questions
What is the difference between a W-9 and a 1099?
A W-9 is filled in by the person being paid, to give the payer their correct name and TIN. A 1099-NEC is filed by the business to report payments to non-employees that reach the reportable payment threshold.
Do I send Form W-9 to the IRS?
No. The IRS says the business keeps the W-9 in its files for four years in case of questions from the worker or the IRS.
Who has to file Form 1099-NEC?
A business that paid people who aren't its employees, such as independent contractors, for services in its trade or business, when payments during the tax year total or exceed the reportable payment threshold.
What happens if a contractor won't give me a W-9?
The IRS says you must withhold 24% backup withholding from reportable payments if a U.S. payee hasn't provided their TIN as required, and file Form 945.
Do I need to e-file Form 1099-NEC?
Yes, if you file 10 or more information returns in a calendar year. The IRS is retiring the FIRE system, so from the 2027 filing season IRIS becomes the only electronic filing platform.
Is a 1099 worker the same as an employee?
No. Employees have income tax, Social Security and Medicare withheld and their wages go on Form W-2. The IRS decides the difference on control and independence, and Form SS-8 can get an official ruling.
