When to request the W-9
Request it when you set the sub up as a vendor, at award or with the subcontract. Don't wait for the first pay application.
The IRS calls that first request the initial solicitation. Pub. 1586 says it must be made "at the time an account is opened (or a relationship initiated)." It is also when you have the most leverage.
Ask every sub and every service vendor you pay, including the ones you think are corporations. The W-9 is where the sub states its tax classification, so it is your record of why a corporation got no 1099.
A foreign sub gives you the right Form W-8 or Form 8233 instead, as the W-9 itself instructs.
Use the current revision of Form W-9, dated March 2024.
Who gets a 1099-NEC for 2026 payments
The threshold is a calendar-year total per payee. A sole proprietor you paid $1,800 in 2026 gets no 1099-NEC unless you backup-withheld from it. One you paid $2,400 does.
| Who you paid | 1099-NEC for 2026 payments? | What decides it |
|---|---|---|
| Individual or sole proprietor | Yes, at $2,000 or more for services | Owner's name on W-9 line 1, business or DBA name on line 2 |
| Single-member LLC that is disregarded | Follows the owner | Owner's name on line 1, owner's classification on line 3a. Report it if the owner is an individual. |
| Partnership, or LLC taxed as a partnership | Yes, at $2,000 or more | Line 3a: Partnership, or LLC with code P |
| C corporation, S corporation, or LLC taxed as either | Generally no | Line 3a: C corp, S corp, or LLC with code C or S. Line 4 may show exempt payee code 5. |
| Law firm, any entity type | Yes, attorneys' fees at $2,000 or more | The corporate exemption does not apply to legal services |
| Corporation paid for medical or health care services | No, but report it on Form 1099-MISC, box 6 | The corporate exemption does not apply to these payments |
| Anyone paid by credit card or a third-party payment network | No | The payment settlement entity reports it on Form 1099-K |
| Supplier paid only for merchandise, freight or storage | No | On the IRS list of payments that don't need a 1099-NEC |
Materials count when they come with the work. The 1099-NEC instructions cover payments for "services performed by someone who is not your employee (including parts and materials)." For a sub who furnishes and installs, report the total you paid, not just the labor.
The $2,000 threshold in plain numbers
The One Big Beautiful Bill Act (Public Law 119-21, section 70433) raised the threshold in Internal Revenue Code section 6041(a) from $600 to $2,000. The change applies to payments made after December 31, 2025. The service-payment rule in section 6041A follows the same figure.
- 2025 payments: $600. Those 1099s were due in early 2026.
- 2026 payments: $2,000. File them and furnish copies to the subs in early 2027.
- 2027 and later: the $2,000 base is indexed for inflation for calendar years after 2026. Check the IRS figure each year before you run your 1099 list.
The deadline did not change. The IRS instructions require you to furnish Form 1099-NEC to the sub and file it with the IRS by January 31. When that date falls on a weekend or legal holiday, the due date is the next business day. January 31, 2027 is a Sunday, so 2026 forms are due Monday, February 1, 2027.
Two form details matter for AP this season. On the December 2026 revision of Form 1099-NEC, nonemployee compensation is reported in box 1a. And if you file 10 or more information returns in total, counting every type together, you must e-file.
What to do when a sub won't send a W-9
The IRS sets the process for a sub who stalls or refuses.
- Ask in writing at setup. That is your initial solicitation. Tell the sub why you need it: without a TIN, you have to backup withhold, and the sub faces a $50 IRS penalty for each failure to furnish a correct TIN under section 6723.
- Backup withhold 24% once payments are reportable. For payments for services, backup withholding follows the same annual threshold. Under section 3406(b)(6), they count as reportable once the year's total to that payee reaches $2,000. Withhold on each payment until the sub gives you its TIN.
- Don't accept "Applied For" as a pause. The 60-day grace period for a sub who writes "Applied For" on the W-9 covers only interest, dividends and certain readily tradable instruments. Nonemployee compensation is subject to backup withholding even while the sub waits for its number.
- Deposit and report what you withheld. Report backup withholding on Form 945, the annual return of withheld federal income tax. Deposit it separately from your Form 941 payroll deposits. You must also file a 1099-NEC for that sub, with the withholding in box 4, whatever the payment amount.
- Make the annual requests. If the initial request gets no TIN, you make up to two annual solicitations. The first is due by December 31 of the year the relationship started, or January 31 of the next year if it started in December. The second is due by December 31 of the following year. A mailed annual solicitation includes a letter that mentions the $50 penalty, a Form W-9 and a return envelope.
If the IRS later proposes a penalty for a 1099 with a missing TIN, Pub. 1586 says acting in a responsible manner generally includes the initial solicitation and any required annual solicitations. If you were required to withhold and didn't, you can be liable for the amount you didn't collect. A payment hold, by contrast, is your own policy, not an IRS rule.
Read line 1 and line 2 before you rely on the form
The form says it on its face: "The TIN provided must match the name given on line 1 to avoid backup withholding."
- Sole proprietor: the individual's name on line 1, the business or DBA name on line 2.
- Single-member LLC that is disregarded: the owner's name on line 1, the LLC's name on line 2, and the owner's classification on line 3a. The March 2024 revision clarified line 3a for this case.
- LLC that is not disregarded: the LLC's name on line 1, and the LLC box on line 3a with C, S or P.
- Corporation or partnership: the entity's name as it appears on its tax return, with any DBA on line 2.
Vendor records are often set up from the name on the sub's invoice, which may be the line 2 name. The 1099 needs the line 1 name with the TIN, so set up the vendor record from the W-9, not from the invoice.
When the name and TIN on a filed 1099 don't match IRS records, the IRS sends a CP2100 or CP2100A notice. You then send the sub a "B" notice. You must backup withhold on payments made more than 30 business days after you received the IRS notice, and stop within 30 days after the sub returns a certified W-9. Pub. 1281 has the B-notice text.
How often to get a new W-9
Form W-9 carries no expiration date. The form tells the sub to furnish a new one if its name or TIN changes, and to give you updated information if it claimed to be an exempt payee and no longer is.
In practice, ask for a fresh W-9 when:
- The sub changes its entity, name or EIN, such as a sole proprietor who forms an LLC.
- The remit-to name on its invoices changes.
- You get a CP2100 notice for that sub.
- A sub comes back after a long gap.
Run a W-9 check before year-end. Pull every sub you paid $2,000 or more in 2026 and confirm a W-9 is on file before January.
Keep the W-9 with the rest of the sub's file
Store the W-9 where AP looks at payment time, next to the sub's subcontract, certificate of insurance and lien waivers. Then whoever approves a payment sees a missing W-9 where they see an expired certificate.
Keep the history, not just the latest form. Record when you asked, when the sub answered, and who reviewed the file. Those dates are your solicitation record if a penalty notice ever arrives.
Protect the file. A W-9 carries a Social Security number or EIN. The form warns requesters that disclosing or using TINs in violation of federal law can bring civil and criminal penalties.
For the full document list by project stage, see documents to collect from subcontractors. For request wording you can paste, see the request email templates.
Where SubLien fits
SubLien requests the W-9 over a secure upload link, sends a capped series of reminders, and stores the file the sub uploads on the same vendor record as its COIs and lien waivers. Each vendor can have its own W-9 contact, often the bookkeeper. A named person on your team opens the original and records Reviewed or Returned. A returned form goes back to the sub with a fresh upload link.
SubLien does not read, extract or check what the sub wrote on the form. There is no IRS TIN matching, no backup withholding calculation, and no 1099 preparation or filing. Those stay with your accounting system and your tax team.
SubLien doesn't give tax advice. How you classify and report each payment is your decision. See W-9 collection or book a 15-minute demo.
Common questions
Do I need a W-9 from a subcontractor that is a corporation?
Ask for one anyway. Payments to corporations are generally exempt from Form 1099-NEC, but the W-9 is how you document that the sub is a corporation. Line 3a shows its tax classification, and an LLC counts as a corporation only if it checks the LLC box with code C or S.
What is the 1099-NEC threshold for 2026?
$2,000 per payee for the calendar year, for payments made after December 31, 2025. It was $600 before. The $2,000 base is indexed for inflation for calendar years after 2026, so check the IRS figure each year.
Does a subcontractor's W-9 have to be signed?
For payments to a nonemployee for services, the Form W-9 instructions say the payee must give its correct TIN but does not have to sign the certification. The exception is a payee that was previously notified it gave an incorrect TIN.
Can I refuse to pay a sub who won't send a W-9?
The IRS does not require a payment hold. Its remedy for a missing TIN is backup withholding of 24% on reportable payments. A hold is your own company policy, so if you use one, put the W-9 requirement in your subcontract or vendor terms.
Does "Applied For" on a W-9 stop backup withholding?
Not for payments to a subcontractor. The 60-day awaiting-TIN period applies only to interest, dividends and certain readily tradable instruments. Nonemployee compensation is subject to backup withholding even while the sub waits for its TIN.
Do I include materials on a sub's 1099-NEC?
Yes, when the materials come with the service. The IRS instructions report services "including parts and materials" in box 1a. Payments to a supplier for merchandise alone don't need a 1099-NEC.
Do I send a 1099-NEC to a sub I paid by credit card?
No. Payments made by credit card or through a third-party payment network are reported on Form 1099-K by the payment settlement entity. They don't go on Form 1099-NEC.
How long is a W-9 good for?
Form W-9 carries no expiration date. The form tells the sub to give you a new one if its name or TIN changes. Ask again when a sub changes its entity or returns after a long gap.
Primary sources
- Form W-9 (Rev. March 2024): line 1 and line 2 rules, signature requirements, the 24% backup withholding rate and the $50 payee penalty.
- Instructions for the Requester of Form W-9: payor backup withholding, the awaiting-TIN rule and Form 945.
- Instructions for Forms 1099-MISC and 1099-NEC (Rev. December 2026): the $2,000 threshold, box 1a, payments to corporations, exceptions and the January 31 deadline.
- Publication 1099 (2026), General Instructions for Certain Information Returns: when to start and stop backup withholding, and reporting it.
- Publication 1586 (Rev. August 2026): initial and annual TIN solicitations and reasonable cause for missing TINs.
- Publication 1281: backup withholding for missing and incorrect name/TINs, including the B-notice text.
- Instructions for Form 945: filing and depositing backup withholding.
- Federal Register, REG-113229-25 (April 17, 2026): Treasury's proposed regulations explaining Public Law 119-21 section 70433, the $2,000 threshold and its inflation indexing.