Form W-9 must be on file before the first payment. Form 1099-NEC is due when payments to one payee reach $2,000 in a calendar year, the threshold for payments made from 1 January 2026, up from $600. The deadline for filing with the IRS and sending the form to the contractor is 31 January. Where the contractor supplies no valid taxpayer identification number, you apply backup withholding at 24 percent.
What you do not do
You do not withhold income tax, pay employer FICA, fund unemployment insurance, or provide benefits, overtime or leave. State tests such as California's ABC test can override the federal position.
Misclassification exposure
Reclassification leaves you owing back taxes, penalties and interest, and it opens the worker's claims for overtime and benefits. Contractors outside the United States are not 1099 workers at all. Form W-8BEN replaces the W-9, and the rules of the country where they work apply.