If you hire freelancers, subcontractors, or any independent worker, you’ll run into two IRS forms with numbers instead of names. People mix them up constantly, and the confusion usually shows up at the worst time, in late January when the reporting deadline is a week away. The short version of 1099 vs W-9: a W-9 goes in, a 1099 comes out. This guide covers what each form does, who is responsible for it, when it’s due, and how the two fit together.
Key Takeaways
- A W-9 is the form a contractor gives you before work starts, and a 1099 is the form you give the contractor and the IRS after the year ends.
- You never file a W-9. You keep it on file and use the taxpayer ID and entity type on it to fill out the 1099.
- For payments made in 2026, a 1099-NEC is required once you pay a non-corporate contractor $2,000 or more in the year, up from $600 for 2025.
- Collect the W-9 before the first payment. Chasing it in January is how businesses end up with backup withholding problems and late 1099s.
- The two forms are the start and end of one process: onboarding a contractor, tracking what you paid them, and reporting it.
1099 vs W-9 in one sentence
A W-9 is a request for a contractor’s taxpayer information that you collect and keep. A 1099 is an information return you send to that contractor and to the IRS reporting how much you paid them during the year.
So the contractor fills out the W-9. You fill out the 1099. The W-9 is never sent to the IRS by anyone. The 1099 is sent to both the IRS and the contractor.
What a W-9 is and who fills it out
Form W-9, Request for Taxpayer Identification Number and Certification, is a one-page form the contractor completes and signs. It gives you four things you need later:
- Their legal name and, if different, their business name.
- Their federal tax classification: individual or sole proprietor, single-member LLC, partnership, C corporation, S corporation, or an LLC that has elected to be taxed as a corporation.
- Their taxpayer identification number, which is either a Social Security number or an Employer Identification Number.
- A signed certification that the number is correct and that they aren’t subject to backup withholding.
You don’t send a W-9 to the IRS. You store it with your vendor records, and you refer back to it when it’s time to prepare 1099s. The IRS expects you to keep it for at least four years after the last 1099 it supported.
The classification box matters more than most people realize. It tells you whether this contractor will need a 1099 at all, which is covered in the next section.
What a 1099 is and who fills it out
Form 1099 is a family of information returns. For contractors, the one you care about is the 1099-NEC, Nonemployee Compensation. You, the business that paid the contractor, prepare it after the calendar year ends. One copy goes to the contractor, one copy goes to the IRS, and you keep one.
The 1099-NEC reports the total you paid that contractor for services during the year. It is how the IRS matches what you deducted as a business expense against what the contractor reports as income.
A few related forms come up for small businesses:
- 1099-NEC covers payments to independent contractors for services.
- 1099-MISC covers rent, prizes, attorney settlement payments, and a few other categories that aren’t contractor labor.
- 1099-K is issued by payment processors and card networks, not by you. If you paid a contractor through a card or a third-party payment app that reports on 1099-K, you generally don’t also issue a 1099-NEC for those payments.
Who needs a 1099 and at what amount
You issue a 1099-NEC when all of the following are true:
- You paid the contractor for services in the course of your trade or business, not for personal work.
- The contractor isn’t a corporation. Sole proprietors, individuals, partnerships, and LLCs taxed as sole proprietorships or partnerships all get one. C corporations and S corporations do not, with a few exceptions such as payments to attorneys.
- The total for the year met the reporting threshold.
- You paid by cash, check, ACH, or direct transfer rather than by card or a reporting payment app.
On the threshold: for payments made during 2025, the rule was $600. Legislation passed in 2025 raised it to $2,000 for payments made in 2026 and later, with the figure indexed for inflation after that. If you’re preparing 1099s in January 2027 for 2026 payments, $2,000 is the number. Confirm the current figure on the IRS instructions each January, because it will move.
The W-9 answers question two for you. If the contractor checked the C corporation or S corporation box, or checked LLC and wrote C or S in the tax classification line, you generally don’t issue a 1099-NEC. If they checked individual, sole proprietor, partnership, or LLC with P or a blank, you do.
Side by side
| Question | W-9 | 1099-NEC |
|---|---|---|
| Who fills it out | The contractor | You, the paying business |
| Who receives it | You keep it on file | The contractor and the IRS |
| When | Before the first payment | By January 31 for the prior year |
| What it contains | Name, tax classification, TIN, certification | Total paid for services in the year |
| Filed with the IRS | No | Yes |
| Penalty exposure | Backup withholding if missing | Per-form penalties for late or missing returns |
Scroll sideways to see all columns.
How the two forms work together
Think of them as bookends on a single process.
- Before the contractor starts, you send them a blank W-9 and they return it completed. You save it with their vendor file.
- During the year, every payment to that contractor is recorded against their vendor record in your books, ideally with a category that marks it as reportable contractor pay.
- After December 31, you total the year’s payments per contractor. For each one at or above the threshold who is not a corporation, you prepare a 1099-NEC using the name and TIN from the W-9.
- By January 31, you send the contractor their copy and file with the IRS.
Step two is where most of the pain comes from. If contractor payments are mixed in with general expenses, January becomes a spreadsheet hunt. Tagging each contractor payment as it happens, so a year-end report can total it by vendor, turns the 1099 into a five-minute job.
What goes wrong, and how to avoid it
Collecting the W-9 after the fact
If a contractor has already been paid and now won’t return a W-9, you’re required to begin backup withholding at 24 percent on future payments, and you still owe a 1099 with whatever information you have. The fix is a policy, not a reminder: no W-9, no first payment.
Trusting memory on entity type
A contractor who says “I’m an LLC” may be a single-member LLC taxed as a sole proprietor, which does get a 1099. The W-9 classification box is the record. Use it, not the conversation.
Double reporting card payments
If you paid a contractor by credit card, the card network handles reporting on a 1099-K. Issuing a 1099-NEC for the same payments reports the income twice and creates a mismatch on the contractor’s return. Track the payment method so you can exclude those amounts.
Missing the deadline
The 1099-NEC is due to both the recipient and the IRS by January 31, or the next business day when January 31 falls on a weekend, with no automatic extension. Penalties scale with how late the form is and are assessed per form, so a business with fifteen contractors that files in March pays fifteen penalties, not one.
Keeping the paperwork light
The paperwork stays light when you have a vendor file with a signed W-9 for every contractor and a ledger that can total payments per vendor at year end. In GlassJar, you record contractor payments against one contact, so the year’s totals are easy to hand to whoever prepares your 1099s. Whatever tool you use, the goal is the same: the numbers for the 1099 should already be sitting in your books before you open the form.
For the payment side, including how to categorize contractor pay and what to record on each transaction, see the 1099 contractor payments guide.
For a filing question specific to your business, talk to a CPA or enrolled agent.
Frequently asked questions
Do I send a W-9 to the IRS?
No. The W-9 stays in your records. Only the 1099 is filed with the IRS.
Can a contractor refuse to give me a W-9?
They can, but then you must withhold 24 percent from their payments as backup withholding and remit it to the IRS. Most contractors return the form quickly once they understand that.
Does a contractor need a new W-9 every year?
No. A W-9 stays valid until something on it changes, such as the contractor’s name, address, entity type, or TIN. Many businesses request a fresh one every few years as a check.
What if I paid a contractor under the threshold?
No 1099-NEC is required. The contractor is still responsible for reporting the income on their own return.
Is a 1099 the same as a W-2?
No. A W-2 reports wages paid to an employee, with taxes withheld. A 1099-NEC reports payments to a non-employee, with nothing withheld. Which one applies depends on whether the worker is legally an employee or a contractor, which is a classification question, not a paperwork choice.
