When to collect W-9s from new contractors
Timing matters. Learn why collecting W-9s before the first payment saves you from a stressful year-end scramble.
1The golden rule: collect before you pay
The single best practice for W-9 collection is to request the form before you issue the first payment. Once a contractor is on your payroll and busy with deliverables, getting them to pause and fill out a tax form becomes much harder. Make the W-9 part of your onboarding checklist—right alongside the contract and payment details.
2Why waiting until year-end backfires
Every January, businesses scramble to collect W-9s so they can file 1099s by the January 31 deadline. Contractors are hard to reach over the holidays, some have changed email addresses, and a few may have moved on entirely. If you wait, you risk filing late (which can mean IRS penalties) or filing with incorrect information. Collecting upfront eliminates this entirely.
3The $600 threshold
The IRS generally requires a 1099-NEC for any contractor you pay $600 or more in a tax year. But here’s the catch: you often don’t know in advance whether a contractor will cross that threshold. A “small” project can turn into a long engagement. The safest approach is to collect a W-9 from every contractor, regardless of the expected payment amount.
4What about mid-year hires?
If you bring on a contractor in June or October, the same rule applies: collect the W-9 before the first payment. Don’t tell yourself you’ll “catch up later.” Set a process where no contractor gets paid without a W-9 on file. Most accounting software and tools like W-9 Nudge can help enforce this workflow.
5Making it easy for contractors
Contractors are more likely to respond quickly if you make the process painless. Send a direct, secure upload link rather than asking them to print, sign, scan, and email a PDF. Avoid requiring them to create an account or download an app. The fewer steps, the faster you’ll get the form back.
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Disclaimer: This post is for general informational purposes only. W‑9 Nudge does not provide tax, legal, or accounting advice. Consult a qualified professional for guidance specific to your situation.