Collecting a W-9 from every subcontractor

Collect it before the first payment, not at year end

Before you pay a subcontractor you have leverage: no form, no check. After you pay, you are asking a busy person for paperwork that benefits only you. By January, filing, you may be chasing someone who no longer works for you at all.

You are collecting what a 1099-NEC needs: the sub's legal name, their taxpayer ID and their address, certified by the person responsible for it being right. You send the W-9 nowhere. It sits in your file as evidence of where those three things came from.

The teeth are backup withholding. Say a sub will not give you a taxpayer ID, or the IRS writes to say the name and number you filed do not match. The obligation then lands on you as the payer: withhold at the current 24% rate and remit it. That is why this is a before-you-pay document.

So collect it in the same packet as the certificate and the license, in the same email — what to require before a sub starts covers the rest of that list. The W-9 is the one item on it with nothing to do with insurance and everything to do with paying them.

Reading the form, line by line

The current revision is one page, and eight places on it matter. Knowing which is which makes a wrong form obvious in seconds rather than months.

That last row is the one people wave through. The signature is why the form is worth holding: your sub certifies, personally, that the number is theirs and that they are not subject to backup withholding. An unsigned PDF has certified nothing. Send it back.

The name has to match the certificate and the contract

Three documents name your subcontractor: the subcontract you both signed, the certificate their agent issued, and line 1 of the W-9. When they do not name the same legal entity, nothing goes wrong today. It goes wrong at a premium audit, or the week a claim lands and your carrier asks who you hired.

It is one of the most common paperwork failures on a small GC's file, and almost never dishonest. The sign on the truck says one thing, the LLC that owns it is named another, and the certificate came off whichever policy was open in front of the agent.

• A trading name on the certificate, the LLC on the W-9. One business, two names. Decide which one signs the subcontract and make the other two agree.
• A person's name where you expected a company. A single-member LLC that has made no election puts the OWNER on line 1 and the LLC on line 2. That can be perfectly correct — read line 2 before you send it back.
• Two related entities. One holds the equipment, one employs the crew, and only one carries the workers' compensation policy. This is the version that costs money.
• A sub who incorporated part-way through. The W-9 on file names a person; the invoices now come from a corporation. Different taxpayer, new form.

Fixing it is two different asks, and confusing them sends the correction to somebody who cannot make it. A wrong name on the certificate goes back to the issuing agent in the top-left box, because they produced it. A wrong name on the W-9 goes back to the sub, and only to the sub. They sign it under penalties of perjury, so nobody else can correct it. “Ask their agent, not the sub” holds for the certificate and the endorsement pages behind it, and for nothing else you collect. A license is corrected at the state board, a safety card at the training provider named on it.

While you have that agent's attention, how to verify a certificate covers what else to ask for, and how to read an ACORD 25 shows where the named insured sits on the page. Reconcile all three names now rather than at the premium audit, where someone lines up what you paid against the subs you can evidence coverage for — by name.

The classification box, and the codes you can mostly ignore

Line 3a takes one tick: individual or sole proprietor, C corporation, S corporation, partnership, trust or estate, LLC with a letter beside it, or other. The letter is the part worth knowing. C means that LLC is taxed as a C corporation, S as an S corporation, P as a partnership.

It matters for one reason: classification generally decides whether a payment is reportable at all. Payments to corporations generally are not reported on a 1099-NEC. Payments to individuals, partnerships and LLCs taxed as partnerships generally are. So an LLC writing “S” is telling you something different from an LLC writing “P”.

One trap generates the name mismatch above. A single-member LLC that has made no election is a disregarded entity and should not tick the LLC box at all. It ticks individual/sole proprietor, puts the owner on line 1 and the LLC on line 2 — the most-mistaken box on the form.

Line 3b arrived with the March 2024 revision and stalls people because it is new. It belongs to flow-through entities: a partnership, a trust or estate, or an LLC that entered “P” on line 3a. Even then it is ticked only when that entity has foreign partners, and is handing the form to a partnership, trust or estate it part-owns. You are not that recipient. On a W-9 sent to you the box stays blank, including when the sub does have foreign owners.

Line 4 carries two codes, and both are almost always empty here. The exempt payee code covers banks, securities dealers, government units, real estate investment trusts and tax-exempt organizations — and, at code 5, corporations. The FATCA code concerns accounts held outside the United States. So a blank line 4 is normal rather than an omission, and a 5 from an incorporated sub is not something to send back either.

A foreign sub signs a W-8, not a W-9

The W-9 is for US persons: a citizen or resident alien, a partnership or corporation organized under US law, a domestic estate or trust. A foreign person cannot properly sign one, and one signed by a foreign person evidences nothing.

The substitute is the W-8 series — a W-8BEN from a foreign individual, a W-8BEN-E from a foreign entity. The tell usually shows up on the certificate rather than the tax form: a named insured with an address outside the United States, or a sub with no US taxpayer number at all.

Stop there. Withholding on payments to foreign persons runs on stricter rules, and a contractor who meets this twice a decade should not improvise it. Hand it to your accountant before the first payment goes out, not after.

Keeping it, and when to ask for a new one

A W-9 has no expiry date printed on it and does not go stale on a schedule. It goes stale when a fact on it changes, which is harder to notice — nothing arrives in your inbox to tell you. Ask for a fresh one when any of these happen:

• The entity changes. A sole proprietor incorporates, an LLC elects corporate treatment, two subs merge. Different taxpayer, new form.
• The name changes, including a new trading name that starts appearing on invoices.
• The address changes — that is where the 1099 is going.
• You are told the name and taxpayer ID you filed do not match. That notice comes from the IRS, and it is the one with a deadline attached.
• Years have passed and nobody has confirmed anything. Re-asking at renewal costs one line in an email you were already sending.

A W-9 lives as long as the information returns it supports — years, not until the job closes out. Federal guidance on employment-tax records runs to at least four years, and most accountants apply the same clock here. Keep it beside the certificates; the two get looked up together.

If you are tracking this by hand, our free tracking template has a w9_on_file column next to the certificate columns. That placement is the point. The W-9 is not an insurance document, but it is chased on the same rhythm, from the same sub.

What Sealinn does with a W-9

Sealinn asks for a W-9 by default, alongside the certificate and the license. It requests one through the same upload link the certificate comes through — no account and no login on your sub's side.

Sealinn then reads eight fields off it: the legal name on line 1, the business name on line 2, the tax classification, the LLC letter where there is one, the line 3b checkbox, the address, the signature date, and whether a taxpayer ID is present.

Sealinn never extracts or stores the number itself. The instruction that reads the form forbids transcribing or echoing a TIN anywhere. What lands in the record is a presence flag: a number is there, or it is not. The digits stay where your sub put them, in the document they sent you. A form with no visible taxpayer ID is noted, not blocked. Your reviewer sees “no TIN detected” beside the document rather than having to spot the empty box.

And a W-9 never auto-approves. A certificate, a license or a safety card can clear in Sealinn without a person. That takes every value reading cleanly and nothing on the document breaking your rules. A W-9 cannot, however cleanly it scanned. How Sealinn reads a certificate sets out that routing, and why this form is carved out of it.

Sealinn does not judge whether the classification box is right, does not check the name and number against IRS records, and files nothing for you. It does not decide for you whether the form is signed either — one of the reasons a person sees every W-9. Sealinn records the name on the form and the signature date it read. A W-9 has no expiry date, so Sealinn tracks it as present or missing rather than as a countdown. What Sealinn checks draws that line for every other document.