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SESK: Stuff Everyone Should Know · sesk.info/founder-w9-and-backup-withholding

A contractor won't give you their taxpayer ID on Form W-9. What must you withhold from their payments?

24% backup withholding.

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  1. 7.65% for Social Security and Medicare
  2. Nothing, contractors are never withheld
  3. 24% backup withholding ✔

Why: Before paying a contractor, get Form W-9 with their name and taxpayer ID. If they don't provide it as required, the IRS says you must withhold 24% from reportable payments as backup withholding.

Huh, didn't know that: The IRS suggests keeping each W-9 in your files for four years.

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Why did the form feel left out? Nobody filled it in.
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References

Answer: 24% backup withholding. Before paying a contractor, get Form W-9 with their name and taxpayer ID. If they don't provide it as required, the IRS says you must withhold 24% from reportable payments as backup withholding.

  1. IRS: Forms and associated taxes for independent contractors www.irs.gov/businesses/small-businesses-self-employed/forms-and-associated-taxes-for-independent-contractors
    You must withhold 24% (backup withholding rate) from reportable payments of nonemployee compensation to U.S. persons
    Checked 2026-10-11.
  2. IRS: Forms and associated taxes for independent contractors www.irs.gov/businesses/small-businesses-self-employed/forms-and-associated-taxes-for-independent-contractors
    the first step is to have the contractor complete Form W-9
    Checked 2026-10-11.

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