What Documents You Need to Hire and Pay a 1099 Contractor

The paperwork you need depends on whether you're hiring the contractor or being hired as one

If you're hiring someone as a 1099 contractor, you need their W-9 form before you pay them anything. If you're working as a 1099 contractor, you need to provide your W-9 to the person or business paying you, and you'll receive a 1099-NEC form at the end of the year showing what they paid you. The exact documents shift depending on which side of the arrangement you're on.

This guide walks through what each party needs to collect, fill out, and keep on file.

Key Takeaways

• If you're paying a contractor, request their W-9 form before the first payment and keep it for at least three years.
• If you're a contractor, provide your W-9 to anyone who pays you and expect to receive a 1099-NEC form by January 31 for the prior year.
• A W-9 asks for the contractor's name, address, tax ID (Social Security number or EIN), and business structure — it takes five minutes to complete.
• You do not need a signed contract to issue a 1099, but having one in writing protects both parties and clarifies payment terms.
• The person paying must report payments of $600 or more on a 1099-NEC; amounts under $600 do not require a 1099 but still count as taxable income.

Form W-9: What the payer needs from the contractor

The W-9 form (officially "Request for Taxpayer Identification Number and Certification") is a one-page document that collects the contractor's tax information. You fill it out once and give it to anyone who will pay you as a 1099 contractor. The payer uses it to report your income to the IRS at the end of the year.

The W-9 asks for: your full legal name, current address, tax identification number (your Social Security number if you're self-employed, or an Employer Identification Number if you have a business), and your business structure (sole proprietor, LLC, S-corp, and so on). There's also a certification section where you confirm you're a U.S. citizen or resident alien and that the tax ID you provided is correct. The form takes about five minutes to complete and never expires — you can use the same W-9 for years as long as your information doesn't change.

If you're the one hiring the contractor, you must request the W-9 before you make the first payment. Keep it on file for at least three years. If the contractor refuses to provide one, you cannot legally pay them as a 1099 contractor — you would need to treat them as an employee instead, which requires different paperwork (W-4, I-9, and payroll setup).

Form 1099-NEC: What the contractor receives at year-end

The 1099-NEC form (Miscellaneous Income) is what you receive from the payer showing how much you were paid during the year. The payer must send it to you by January 31 of the following year if they paid you $600 or more. You use this form to report your income on your tax return.

The 1099-NEC shows the payer's name and address, your name and address, the total amount paid in Box 1 (Non-employee compensation), and the payer's tax ID. You'll receive Copy B (for your records) and Copy C (to file with your state if your state requires it). The payer sends Copy A to the IRS. If you receive multiple 1099-NECs from different payers, you add them all together when reporting your income.

Important: if you were paid less than $600 total, the payer is not required to send you a 1099-NEC. However, that income is still taxable and you still need to report it on your tax return. Keep your own records of all payments received, regardless of the amount.

Other documents to have in place

While a W-9 and 1099-NEC are the tax documents, you should also consider a written agreement between the payer and contractor. This isn't required by the IRS, but it protects both parties by spelling out the scope of work, payment amount, due date, and what happens if either party wants to end the arrangement. A straightforward one-page statement of work is enough — it doesn't have to be a formal contract.

If the contractor will have access to sensitive information (client data, trade secrets, financial records), you may also want a confidentiality agreement or non-disclosure agreement (NDA). These are optional but common in fields like consulting, software development, and marketing.

Some industries or clients require additional documents. For example, if the contractor will work on-site, you might need proof of insurance. If they're in healthcare or education, background checks may be required. Check with your industry or client to see if there are standard requirements beyond the W-9.

How to get and file a W-9

The W-9 is available free from the IRS website (irs.gov). Search for "Form W-9" and read the PDF. You can print it and have the contractor fill it out by hand, or send them the digital version and ask them to type it in and email it back. There's no official online filing system for W-9s — it's a document you keep on file, not one you submit to the IRS.

As the contractor, you can fill out a W-9 as soon as you know you'll be doing work for someone. You don't wait until the end of the year. Provide it before you start work or with your first invoice. If your information changes (you move, get an EIN, change your business structure), fill out a new W-9 and send it to anyone currently paying you.

As the payer, store the W-9 in your records — either in a folder with that contractor's invoices or in a dedicated vendor file. You don't send it anywhere; you just keep it. At the end of the year, you'll use the information on the W-9 to fill out the 1099-NEC and report it to the IRS.

Reporting payments to the IRS

If you paid a contractor $600 or more during the year, you must file a 1099-NEC with the IRS by January 31 of the following year. You'll also send a copy to the contractor. The 1099-NEC is filed electronically through the IRS e-file system or through tax software designed for businesses.

You'll need the contractor's name, address, and tax ID (from the W-9) to complete the 1099-NEC. You'll also need your own business tax ID and the total amount paid. If you paid multiple contractors, you file a separate 1099-NEC for each one.

If you paid a contractor less than $600, you don't file a 1099-NEC with the IRS, but you should still keep records of the payment. The contractor is still responsible for reporting that income on their tax return.

Record-keeping and what to save

Keep the W-9 on file for at least three years. Store it with your vendor records, contracts, and invoices related to that contractor. If you're audited, the IRS may ask to see your W-9s to verify you reported 1099 income correctly.

As a contractor, keep copies of all 1099-NECs you receive. The IRS also receives a copy, so your tax return should match what's on the 1099. If there's a discrepancy (the 1099 shows a different amount than what you were actually paid), contact the payer and ask them to file a corrected 1099-NEC (Form 1099-NEC with "CORRECTED" marked on it).

Both payers and contractors should also keep invoices, payment records, and any written agreements. These documents support your tax filing and protect you if questions come up later.

Frequently Asked Questions

Do I need a signed contract if I'm using a W-9?

No. The W-9 is a tax document, not a contract. You can pay someone as a 1099 contractor with just a W-9 and no written agreement. However, a straightforward written agreement spelling out the work, payment, and timeline is a good idea for both parties — it prevents misunderstandings and protects you if a dispute arises.

What if the contractor doesn't have a Social Security number or EIN?

They need one to work as a 1099 contractor. If they're a U.S. citizen or resident alien, they can get a Social Security number from the Social Security Administration. If they're a non-resident alien or a business entity, they need an Employer Identification Number (EIN) from the IRS. They cannot provide a W-9 without one of these.

Can I pay someone as a 1099 contractor if they refuse to give me a W-9?

No. You must have a W-9 on file before paying someone as a 1099 contractor. If they refuse, you cannot legally pay them as an independent contractor. Your options are to hire them as an employee (which requires different paperwork) or not hire them at all.

What happens if I don't send a 1099-NEC when I should?

The IRS can fine you for not filing 1099s. The penalty varies depending on how late you file and whether it was intentional. You may also face penalties if your 1099 reporting doesn't match the contractor's tax return. File on time (by January 31) to avoid these issues.

Do I need to report 1099 income if I received less than $600?

Yes. The $600 threshold only determines whether the payer must send you a 1099-NEC. All income is taxable regardless of the amount. Keep your own records of all payments and report them on your tax return, even if you don't receive a 1099.