What You Need to Know About IRS Form W-9 in 2026

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Understanding IRS Form W-9: Purpose & Importance

Form W-9 is the IRS form businesses use to collect a payee’s name, tax classification, and taxpayer identification number (TIN) before reporting payments on Form 1099. The IRS has proposed a revision (draft Rev. June 2026) that adds a digital asset broker certification and exempt payee Code 14, but it isn’t final, so continue using the Rev. March 2024 form for now.

IRS Form W-9, Request for Taxpayer Identification Number and Certification, is used by businesses to collect a payee’s legal name, Taxpayer Identification Number (TIN), and tax classification from individuals and entities that aren’t employees. This information is required to properly prepare and file information returns, such as Form 1099-NEC or Form 1099-MISC, with the IRS.

Unlike payroll forms (e.g., Form W-4 for employees), the W-9 stays with the business requesting it and is not submitted directly to the IRS (unless under audit or examination). Proper completion and recordkeeping of W-9s help reduce backup withholding and reporting errors.

What’s New on the Form W-9 for 2026

The IRS has released a draft revision of Form W-9 (most recently Rev. June 2026) with several important updates. While the draft is not yet final for filing, it provides insight into changes expected for the 2026 tax year.

1. New Digital Asset Broker Certification (Part II)

A new checkbox in the certification section allows certain U.S. digital asset brokers to certify that they are exempt from information reporting under specific IRS regulations. This update aligns Form W-9 with evolving digital asset reporting requirements and the introduction of Form 1099-DA.

2. TIN Rules for Sole Proprietors & Disregarded Entities (No Change in the June Draft)

The June 2026 draft keeps the current TIN rules for these payees:

Sole proprietors who have an EIN may enter either their SSN or their EIN, the same as the current form.

An earlier draft would have required an SSN, but the June 2026 draft dropped that change.
Disregarded entities, such as single-member LLCs, must report the owner’s TIN, not a separate entity EIN.

3. New Exempt Payee Code (Code 14)

The draft introduces a new exempt payee code (Code 14) for certain digital asset transactions that are exempt from backup withholding through calendar year 2026, under IRS Notice 2025-33.

Note: The June 2026 version is still a draft. Keep using the current Rev. March 2024 form until the IRS releases the final version; then confirm you’re on the final one.

Who Needs to Complete a Form W-9 in 2026?

The payee — not the payer — generally completes Form W-9. Businesses should request a W-9 before making payments that require IRS reporting, including payments to:

Independent contractors and freelancers
Vendors providing services
Landlords and property managers
Individuals receiving certain types of income
Entities that will receive a Form 1099

Collecting a W-9 at the beginning of a working relationship helps prevent delays, errors, and compliance issues at year-end.

Key Context: 1099 Reporting Thresholds in 2026

Recent tax law changes retroactively reinstated the $20,000 and 200-transaction threshold for Form 1099-K reporting, and raised the Form 1099-NEC and 1099-MISC threshold from $600 to $2,000 for most payments made in 2026 and later. The IRS says the $2,000 threshold may be adjusted for inflation beginning in 2027. While this does not directly change W-9 requirements, it affects which information returns businesses may need to file when paying contractors or platform sellers.

Common Mistakes to Avoid

To stay compliant and avoid IRS penalties, businesses should watch out for:

Using outdated versions of Form W-9
Accepting incomplete forms missing a TIN or signature
Incorrect TIN entries, especially for sole proprietors and disregarded entities
Failing to request W-9s during onboarding
Not verifying name and TIN combinations

Best Practices for Managing W-9s

If a payee doesn’t provide a valid TIN, you generally must withhold 24% of reportable payments as backup withholding. Strong W-9 processes make year-end reporting easier and reduce risk:

Request W-9s before issuing the first payment
Use electronic W-9 collection and e-signatures
Store W-9s securely for easy access and compliance
Verify TINs using IRS TIN Matching when possible

Many modern payroll and HR platforms support W-9 collection, secure storage, and integrated 1099 reporting.

W-9 vs. W-4: Understanding the Difference

Form	Purpose
W-9	Used by independent contractors, vendors, and non-employees to provide TIN and certification
W-4	Used by employees to calculate federal income tax withholding

Stay Proactive With W-9 Compliance

Handling Form W-9 correctly is more than a year-end task — it’s an ongoing compliance responsibility. By understanding the June 2026 draft updates and building W-9 collection into your onboarding workflows, businesses can reduce errors and simplify reporting.

Staying proactive with W-9 compliance helps ensure accurate filings, fewer IRS notices, and a smoother tax season overall. For more year-end deadlines and figures, see our Year-End Payroll and HR Guide. Employees complete Form W-4 instead. See Key 2027 W-4 Form Changes You Need to Know.`

Frequently Asked Questions

Is there a new Form W-9 for 2026?

The IRS has posted a draft (Rev. June 2026) but hasn’t finalized it. Keep using the current Rev. March 2024 form and switch once the IRS releases the final version.

Can a sole proprietor use an EIN on Form W-9?

Yes. The current form (IRS Form W-9, Rev. March 2024) lets a sole proprietor with an EIN enter either an SSN or an EIN. The June 2026 draft keeps that option. An earlier January 2026 draft would have required an SSN, so check the final form when it’s released.

What is the 1099-NEC reporting threshold?

$2,000 for most payments made in 2026 and later, up from $600. The IRS says the threshold may be adjusted for inflation beginning in 2027. See the Instructions for Forms 1099-MISC and 1099-NEC.

What happens if a payee doesn't give me a W-9?

You generally must withhold 24% as backup withholding on reportable payments until you have a valid TIN.

Do I send Form W-9 to the IRS?

No. Keep it in your records and use it to prepare Forms 1099. The IRS only asks for it if you’re audited.

Looking for a more straightforward way to manage contractor payments and tax forms?

Book a demo with APS to see how we streamline payroll, 1099 reporting, and W-9 compliance in one system.

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