7 W-9 Mistakes That Delay Contractor Payments

The W-9 is the shortest piece of paperwork a contractor fills out — and the one that most reliably holds up a check. A single wrong box or a missing number can kick off 24% backup withholding, freeze payments, or trigger a scramble to refile at tax time.

Here are the seven mistakes that show up on nearly every W-9 audit, and how to avoid each one.

What a W-9 is (quickly)

IRS Form W-9 is a "Request for Taxpayer Identification Number and Certification." A general contractor (or any business that pays you $600 or more per year) uses it to gather the information they need to issue a 1099-NEC at year-end. The form has four data sections (name, business name, entity type, TIN) and a certification signature.

The 7 common mistakes

1. Name mismatch between Line 1 and the TIN on file with the IRS

Line 1 must be the exact legal name registered with the IRS under the TIN you're providing. A sole proprietor named "Maria García" operating as "García Construction" must put "Maria García" on Line 1 and "García Construction" on Line 2 — not the other way around. A name/TIN mismatch triggers a CP2100 notice and backup withholding.

2. Wrong entity type checkbox

Line 3 asks for the federal tax classification. The most common mistakes:

• Single-member LLC owners checking "Limited liability company" instead of "Individual/sole proprietor" (a single-member LLC is a disregarded entity for tax purposes — usually should be classified as individual).
• S-corporations checking "C Corporation" (or vice versa).
• LLCs with an S-election checking "Limited liability company" without entering the proper classification code in the adjacent space.

3. Missing TIN entirely

The single biggest W-9 failure. No TIN means the payer cannot file a 1099, which means backup withholding starts immediately on the next payment.

4. Using SSN when EIN should be used

Corporations, partnerships, and multi-member LLCs must use an EIN. Sole proprietors and single-member LLCs may use either — but entering an EIN on the form protects the owner's SSN from being shared with multiple payers, a basic identity-protection practice. If you're a sole proprietor without an EIN, apply for one free on the IRS website.

5. Missing or unsigned certification

Part II of the W-9 is the certification — the signer confirms under penalty of perjury that the TIN is correct, they are not subject to backup withholding, and they are a U.S. person. A W-9 without a signature is not valid. Many contractors email a pre-filled W-9 and forget to sign before sending.

6. Outdated form revision

The IRS occasionally revises the W-9. Using an outdated revision isn't automatically invalid, but some general contractors' compliance systems will reject anything older than a specific revision. Always download the latest from irs.gov/forms-pubs/about-form-w-9.

7. Wrong address for 1099 delivery

The address on Line 5 is where the 1099 will be mailed. Using an old PO box or a job-trailer address means you may never receive the 1099, which creates problems at tax time. Use the contractor's permanent business address.

The knock-on effects of a bad W-9

• Backup withholding: 24% withheld from every payment until corrected.
• Delayed payments: most modern general contractors won't cut a first check until a valid W-9 is on file.
• Missing 1099s at year-end, forcing the contractor to reconstruct income from bank records.
• IRS CP2100/CP2100A notices to the payer — which tend to make the contractor look like a problem vendor.

How PaidWrite checks your W-9

PaidWrite scans each of the seven checkpoints above. It verifies the TIN field isn't blank, the entity type matches a likely classification, the signature block is filled, and the form revision is current. If anything is off, the app flags it before you send it to the general contractor.

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