IRS Deadline: February 1, 2027
A contractor's refusal to hand over a completed Form W-9 doesn't excuse you from filing. File Form 1099-NEC anyway once a contractor refuses to provide a W-9, and start withholding 24% backup withholding on every future payment until a valid taxpayer ID number shows up. The IRS holds the payer, not the refusing contractor, responsible for getting the return filed correctly, and a missing TIN doesn't protect you from the $60-$340 per-form penalty tiers that apply to late or incomplete 1099s.
The IRS cross-checks every 1099-NEC against the contractor's tax return through its information-matching program, and a blank or wrong TIN field is one of the most common triggers for a CP2100 "B-notice." Businesses that skip filing because a contractor stonewalled the paperwork end up on the hook for a penalty that was designed for the contractor's non-cooperation, not the payer's. The fix isn't complicated, but it has a specific sequence, and doing it out of order is what gets filers in trouble in 2026.
If you would rather not do this on paper, e-file Form 1099-NEC online with TaxFormHero instead.
Work through these steps in order. Each one builds the paper trail that protects you if the IRS ever asks why a return went out with a missing or incorrect TIN.
Once the return is ready, e-filing directly with TaxFormHero lets you submit the 1099-NEC on the pay-per-form plan even with an incomplete TIN field, then file a correction once the contractor finally complies.
Backup withholding isn't optional once a contractor refuses a W-9 request — it's the IRS's built-in substitute for the missing TIN. You withhold 24% of every reportable payment made after the solicitation deadline and remit it using Form 945, not the 1099-NEC. That withholding stops the moment you receive a valid TIN, and you don't retroactively withhold on payments made before the refusal was confirmed.
Most filers get this wrong in one of two ways: they either withhold before giving the contractor a fair chance to respond, or they never start withholding at all and just file a blank-TIN 1099-NEC and hope for the best. Neither protects you the way the combination of solicitation plus withholding does.
A 1099-NEC filed without a TIN is treated the same as a 1099-NEC filed with an incorrect one — both fall under the IRS's information-return penalty structure, which runs in tiers of $60, $130, and $340 per form depending on how late the correction comes and whether the failure looks intentional. The tiers exist to punish sloppy filing, not contractor non-cooperation, which is exactly why the solicitation paper trail matters: it's your evidence that the missing TIN wasn't your fault.
A business that pays a handful of contractors and hits the 2026 1099-NEC reporting threshold of $2,000 for any one of them still has to file, refusal or not. Skipping the return because one contractor won't cooperate puts every other correctly filed form at risk of scrutiny too.
None of these change your filing obligation. They change how much documentation you need to defend the filing.
File the 1099-NEC without waiting
E-file with a missing or pending TIN and correct it later, per form, no subscription.
You still file the 1099-NEC for the payments already made, using whatever TIN information you have on file, and you begin backup withholding on payments going forward only — backup withholding isn't retroactive. Document the date you learned of the refusal, since that's when your solicitation clock starts.
Yes — a payee who refuses to furnish a correct TIN when properly requested can face a separate IRS penalty of $50 under section 6723, though that penalty is assessed against the contractor, not against your business. It doesn't remove your obligation to file or withhold.
That's a contract term between you and the contractor, not a tax rule — the IRS doesn't require you to withhold the entire payment, only 24% backup withholding once the solicitation deadline passes. Some businesses choose to hold full payment as leverage, but that's a business decision, not a filing requirement.
Contractors in trades that run high volumes of subcontractors — HVAC and plumbing businesses among them — see this refusal pattern often enough that building the solicitation-and-withholding process into standard onboarding saves a lot of scrambling every January.
What happens if a contractor refuses to give you a W-9?
You request it in writing, start 24% backup withholding on future payments once a deadline passes, and file the 1099-NEC anyway using the best information available. The refusal doesn't remove your filing obligation.
Do I still have to file a 1099-NEC without a TIN?
Yes, you file the 1099-NEC even without a TIN — leaving out the return entirely risks the same $60-$340 penalty tiers as a late or incorrect filing. Mark the TIN field as unavailable and keep your solicitation records.
What backup withholding rate applies when a contractor refuses a W-9?
The backup withholding rate is 24% of every reportable payment made after the solicitation deadline. It's remitted through Form 945, separate from the 1099-NEC filing.
Can I refuse to pay a contractor until they provide a W-9?
You can build that into your contract terms, but the IRS only requires 24% backup withholding, not full payment refusal. Whether to withhold the full amount is a business decision, not a tax rule.
How many times do I have to ask for a W-9 before I file anyway?
One initial solicitation plus two annual follow-ups is the IRS standard for reasonable-cause protection, but you still file the 1099-NEC on time regardless of how many requests you've sent. Waiting on the W-9 is never a reason to file late.
Does a missing TIN protect me from IRS penalties?
No, a missing TIN by itself doesn't protect you — documented solicitation attempts do. Filers who can show they asked at least once and followed up annually have a reasonable-cause defense against the $60-$340 penalty tiers.
What form do I use to report backup withholding to the IRS?
Backup withholding gets reported and deposited using Form 945, the Annual Return of Withheld Federal Income Tax. It's separate from the 1099-NEC form itself.
Is a 1099-NEC required if the contractor's TIN is wrong, not missing?
Yes, an incorrect TIN is treated the same as a missing one under IRS penalty rules, so the filing is still required and the same solicitation process applies. Correct the TIN with an amended 1099-NEC once you get accurate information.
The solicitation paper trail is worth more than most filers assume: a documented initial request plus two annual follow-ups is the difference between a penalty notice and a clean reasonable-cause defense if the IRS ever flags the missing TIN. Keep the request dated, keep the response (or non-response) dated, and file on time regardless of where that trail stands come the 2026 deadline.
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General information, not tax advice. Please don’t type Social Security or tax ID numbers here.