Aren't there exceptions to certain companies that a W-9 would not be required? For example companies that are incorporated or universities?


You are required to know if a vendor should have its payments reported on the 1099 information return. One of the ways to determine if a vendor qualifies for 1099 reporting is to get a W-9 signed by them certifying what type of entity the vendor is and whether they are exempt from back up withholding. If you do not have the appropriate documentation to support non-reporting of a vendor when in fact they should be receiving a Form 1099, then your company is exposed to penalties for failure to file.

Legally there is no requirement to get a W-9 and therefore there is no 'exemption.' However, many companies consider it good business practice to require a W-9 for all vendors. Under this approach you don't have to guess whether or not a vendor should be receiving a 1099 information return. The IRS says you are not liable for non-reporting if the vendor submitted a W-9 on which it certified that it was incorporated and you accepted the W-9 information in good faith. However, once you know that a vendor is reportable, you become liable at that point to report and withhold as appropriate.

Have more questions? Submit a request